Crash test: How RIAs can survive the next recession
1. Get Out While You Still Can
Valuations for RIAs are approaching their pre-financial crisis highs, according to David DeVoe, managing parter at RIA M&A consultancy DeVoe & Company. RIAs looking to sell can command between 4x and 6x cash flow for an $100 million firm, 5.5x to 7x for a $500 million firm, and as much as 9.5x cash flow for a $1 billion firm, DeVoe said.
What advisors should know about the new valuation standard
What’s an RIA really worth?
Getting an answer, it seems, depends on what yardstick you use to measure it. Discounted cash flow has recently become the new de facto standard. But untangling how that model really operates, and what buyers and sellers should ultimately be keeping an eye on in the sales process, can be challenging.
Even after deal, will Chalice Financial have 'right service mix'?
Chalice Financial Network is upping the stakes in the competitive platform provider market.
Chalice has acquired Succession Link, an online matching service for RIAs looking to buy or sell their firms, and has forged a strategic alliance with Oak Street Funding, a bank subsidiary that provides commercial financing for financial service businesses.
Why M&A’s ‘M&M’ sluggers are hitting home runs
Baseball greats Mickey Mantle and Roger Maris were known as the “M&M Boys” when they were hitting home runs for the New York Yankees in the 1960s.
A half-century later, the RIA business has their own pair of “M&M” sluggers —Mariner Wealth Advisors and Mercer Advisors. In November alone, the two firms demonstrated their considerable M&A prowess, snapping up four advisory firms with over $3 billion in combined assets under management.
Why building a multibillion dollar firm is not for the faint of heart
If you want to become a multibillion dollar advisory firm, be prepared to make some hard decisions.
Principals committed to growing their RIA into an enterprise firm need to recognize the difference between management and leadership, said Brent Brodeski, CEO of Savant Capital Management.
“Management is telling people what to do,” Brodeski told advisors at a session titled “The Road to a Multi-billion Dollar Firm: Pushing Past Challenges and Setbacks” at Charles Schwab’s annual IMPACT conference. “Leadership is having a vision and attracting people to it.”
AssetMark's big TAMP move
AssetMark, the industry's third-largest turnkey asset management provider, hit the $50 billion mark by agreeing to buy Global Financial Private Capital, a $5.7 billion RIA that provides outsourcing services to around 200 advisors.
Although the TAMP business is dominated by Envestnet with over $500 billion advisor assets on its platform, AssetMark, headed by Charles Goldman, former head of Schwab Institutional and president of Fidelity's clearing and custody business, is making an aggressive push to catch number two SEI Advisor Network, which has around $65 billion in assets.