The Wire

November 15, 2017

RIA valuations too specific to base on other sales

Financial advisers looking to catch a ride on the consolidation wave by putting their firm up for sale should be open to the reality that valuations are often more art than science.

"Stay out of the valuation trap by worrying less about what you think your firm is worth, and think about your value to a potential buyer," said John Furey, principal and founder of Advisor Growth Strategies.

October 26, 2017

What does the HighTower-PE deal mean for RIAs?

What does HighTower Advisors' $100 million recapitalization deal with private equity firm Thomas H. Lee Partners mean for the financial advisory business? It's a major endorsement of the RIA business model, industry observers agree, and underscores the massive influx of PE money into the space — and the subsequent questions those investments raise. Read More


June 26, 2017

Why “Sustainable” Firms are Worth More

Valuation multiples are based on a lot more than asset totals. RIA owners often ask “What is my firm worth?” Many believe valuation multiples are relatively uniform across the RIA spectrum. In fact, valuations vary greatly, and are driven by what we call “sustainability.” Sustainable businesses are marked by five elements: size, margin, an effective/differentiated growth strategy, scalability and professional practices. These elements interact in a virtuous circle to drive value. Read More


June 22, 2017

A Goldman Sachs team attempts breakaway with a client as stakeholder in new RIA and suffers the consequences

A large, successful Goldman Sachs & Co. team will spend more time tending radishes and tomato vines this summer than building an RIA after trying to make a breakaway that includes an ultra high net worth client as a financial backer.Read More

March 17, 2017

What's Your RIA Worth? A Framework for Understanding Valuations

If you own a stake in a registered investment adviser, you probably spend time estimating what your shop is worth. With good reason.

Fees are coming down. Which puts pressure on annual compensation. Which makes equity stakes increasingly important to your personal wealth. Which means your retirement activities, whether you flip burgers in a greasy spoon or nurse fruity drinks on a Carribbean beach, depend on answers to three questions: Read More

January 26, 2017

Lessons for RIAs and vendors from a platform providers' demise

 It’s not as easy as it looks.

That applies to both breakaway brokers and the platform providers who service them — a fact most recently underscored by the demise of Sanctuary Wealth Services, which will go out of business at the end of March.

After nearly eight years of helping breakaway brokers become functioning independent RIAs by providing compliance, reporting, investment management and consulting services, Sanctuary saw too many firms defect to keep the business going. Read More

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