The Succession Resource Group 2025 Advisor M&A Report
Portland, OR – February 25, 2025 – Succession Resource Group, Inc. (SRG) published its ninth annual review of advisor acquisition activity, unveiling key trends for advisors interested in buying, selling, and succession planning. In this year’s data release, SRG reported on one of its largest pools of transaction data, drawing on 176 transactions representing more than $13.3 billion in assets under management, all completed during the calendar year 2024. This data represents the largest and most comprehensive transaction data in the industry, pulling information from deals facilitated or listed by SRG, as well as transaction data not facilitated by SRG – from industry lenders including Oak Street Funding, PPC Loan, and Skyview Partners. Overall, M&A valuations appear to have returned to historical norms, increasing a modest 1.83% over 2023 valuations despite a variety of influential external factors including an improved, but still elevated, interest rate environment, a national election, and increased attention on the values paid by Private Equity (PE) and PE-back industry aggregators. M&A Highlights: Based on current “rules of thumb” for benchmarking purposes, the average EBITDA multiple for advisory ‘businesses’ in 2024 remained steady at 9.20x, while the average topline recurring revenue multiple for ‘books of business’ climbed to 3.08x, up 1.83% over the prior year’s RIA (recurring revenue) multiple of 3.02x. Advisors with sell-side advocacy (in a competitive bidding scenario), as opposed to a one-on-one peer-to-peer negotiated sale, continued to beat the “market.” Advocated sales obtained 6.91% more value as compared to last year’s average multiple (3.07x), while also receiving an average down payment of 75.00%, as compared to 61.00% for non-advocated / DIY deals. These results are likely driven by increased demand in 2024, as evidenced by the average number of offers SRG obtained per seller (an average of five offers per listing, up from an average of three offers in 2023) while the average time from listing to funding reached an all-time efficiency record of 129 days. Out-of-state buyers continue to increase in frequency, with 33.00% of all 2024 deals involving a buyer in a different state. Survey Data: In 2024, SRG conducted a succession planning survey with more than three hundred respondents. The results found:Internal succession plans remain a top priority for advisory firms. Of more than three hundred firms polled, 28% indicated that succession planning was “a primary focus for 2025,” with 48% indicating their “ideal buyer is/will be” their internal team. When asked to “Rate your overall level of succession readiness” on a scale of 0-10, with zero indicating “Not ready at all” and a score of ten representing “Plan is communicated, written, and shared,” only 1% of respondents indicated they had a plan that has been written and shared, with 56% scoring themselves a five or less. Only 5% of respondents indicated that their ideal buyer is/will be a PE firm or industry aggregator, despite 11% of the respondents representing firms with more than $1 billion in AUM, and 4% with more than $5 billion. Most noteworthy was the indication that 24% of advisors have no plans to retire, and that 43% plan to retire in less than ten years. Market Trends: Despite increased value expectations from advisors citing published deal activity and marketing collateral about/from PE firms, values paid for RIAs in 2024 were in line with SRG expectations based on historical deal data, remaining consistent and sustainable. Figure 1: Average RIA (Recurring Revenue) Multiple Down payments remain consistent in 2024, increasing slightly from an average of 63.00% cash down in 2023 to 65.00% cash down in 2024. SRG expects down payments to continue to rise in 2025 given the increased cash flow obtained by buyers using industry lenders’ ten- year amortization schedules versus the shorter six (5.94) year amortization schedule with seller notes. In 2024, the amortization on seller notes ranged from as short as one year to as long as 24 years. Just over half (52.60%) of the deals in 2024 included a retention clause designed to account for potential attrition post-sale, including deals with a clawback, contingent escrow payments, and bank holdbacks. The average target retention rate in 2024 was 88.00% of annual gross revenue, measured one year after closing. As the market for advisory practices continues to evolve and mature, the range of values/multiples paid in the market continues to expand. Nearly two-thirds (62.8%) of deals were paid between 2.50x and 3.50x recurring revenue, but over 20% received a multiple of more than 3.50x. And for the first time on record, none of the deals received a multiple below 1.50x. Overall, buyer demand remained strong considering the higher-than-normal interest rate environment, with the 2024 average buyer-to-seller ratio at 66:1, with over half (51.8%) of the buyers having acquired an advisory firm previously. We anticipate that the buyer-to-seller ratio will stay steady as firms continue to focus on organic growth, team/ensemble development, and internal succession planning. All cash deals represented 25.3% of transactions, down from prior years. However, deals with 100% of the funds paid within the first 12 months of closing represented 51.3% of all deals, which is more consistent with historical expectations. Based on deals completed by SRG in 2024, third-party financing usage is down, likely due to higher interest rates than seen in previous years. 43.2% of the deals in 2024 used some form of outside capital. However, sellers prefer buyers who are working with a lender, as the average down payment when a lender is involved was 73.8%, while the average down payment without a lender was 48.5%. When seller financing was used in 2024, 56.8% of all deals, the average amortization was 5.94 years at 4.9% interest, indicating the seller’s confidence in the buyer’s ability and overall fit given the below-market interest rate. Internal succession planning continues to mature. The average tranche sold to internal successors reached 20.9% of the firm, up from the prior-year average of 18.4%. Overall, 36.0% of advisors’ succession plans in 2024 leveraged external capital to assist next-gen advisors with the buy-in, down from 58.3% of succession
Succession Resource Group Welcomes Industry Veteran & Expert Todd Fulks as General Counsel
Portland, OR – December 10, 2024 – Succession Resource Group (SRG), a leading consulting firm specializing in wealth management business valuations, employment solutions, succession planning, and M&A transactions, proudly announces the appointment of Todd Fulks, JD as General Counsel. In this role, Fulks will oversee all legal matters for SRG, while also providing invaluable support to SRG’s advisor clients. Fulks will help deliver personalized solutions, including employment agreements, equity-sharing arrangements, M&A contracts, and entity formation documents. His vast legal and industry expertise will amplify value to SRG clients, ensuring modern, robust and tailored solutions to meet advisors’ unique and ever-evolving needs. “Todd’s extensive experience in succession planning, contracts, and mergers makes him an outstanding resource for our clients. His deep understanding of legal and compliance complexities, coupled with his ability to structure and execute multifaceted deals sets him apart in the industry. We’re excited to add such a seasoned professional to our ranks and look forward to the significant contributions he will make to our clients and our firm,” said David Grau Jr., Founder and CEO. Fulks brings over two decades of experience in M&A, legal and compliance within the financial services sector. Prior to joining SRG, he served as Senior Vice President of Succession and Acquisition at Osaic, where he was instrumental in developing and implementing comprehensive succession strategies for financial professionals. Fulks’ background includes a wide range of expertise, from contract development and execution to helping advisors build lasting legacies through strategic agreements. “As General Counsel, my priority is to make sure SRG’s clients have the best tools and strategies at their fingertips to tackle their business challenges with confidence,” said Fulks. “SRG is a trailblazer in the financial services industry, and I’m thrilled to be part of a team dedicated to providing outstanding client experiences and showcasing the impact of innovative solutions.“
Succession Resource Group Facilitates Successful Sale for Longtime Financial Advisor
Providing professional guidance in a challenging market environment, SRG secures favorable deal terms for the $91M AUM practice Portland, OR – September 14, 2023 – Succession Resource Group (SRG) is pleased to announce it has facilitated the successful sale of a well-established financial advisory firm. The transaction was completed September 2023, following an 11-month process. Due to the ongoing transition, the parties have requested that their names not be disclosed. About the Transaction The seller, an experienced financial advisor, engaged SRG October 2022, after facing challenges in a previous private deal attempt. Initially, the seller attempted to sell his practice to a friend and local advisor, but the process was complicated by a significant market correction in June 2022, when the S&P 500 fell nearly 20%. The decline in revenue led the buyer to seek adjustments to the purchase agreement, causing the seller to question whether they were getting the best price and terms. Frustrated by the self-negotiation process, the seller turned to SRG for advocated support. SRG provided the seller with comprehensive valuation services and a well-refined process, ultimately facilitating a successful sale of the $91.74 million AUM practice, which boasts 98.42% recurring revenue and serves 146 households. The transaction also included the retention of a highly compensated administrative employee, ensuring continuity of service for clients. Market and Offer Highlights The sale attracted significant interest from potential buyers, with 87 parties expressing interest in the opportunity. After careful vetting, SRG presented the seller with eight elite buyers, resulting in three formal offers. While none of the offers exceeded the $2.9 million asking price, all offers included down payments of 80% or higher, with two out of three offers offering over 95% long-term capital gains tax treatment. The final deal, which was accepted, provided a 3.82x multiple on recurring revenue, along with a 90% non-refundable cash down payment plus staff expenses—significantly more favorable terms than a previous deal the seller had considered, which offered a 3.19x multiple and a 60% non-refundable cash down payment. Kristen Grau, Director of the Seller Advocacy Program at SRG, shared her thoughts on the transaction: “This transaction underscores the importance of professional guidance in achieving the best possible outcome, especially in a challenging market environment. The seller’s decision to engage with SRG after a previous deal fell through allowed us to leverage our expertise and market insights to secure terms that far exceeded the seller’s expectations. We’re proud to have been able to provide the support they needed to retire with confidence, knowing their clients will be well cared for.”
The Succession Resource Group 2024 Mid-Year Advisor M&A Update
The comprehensive report identifies significant trends in first and second quarter advisor M&A activity
2024 Advisor Valuations Rebound to All-Time Highs
PORTLAND, Ore. (Feb. 22, 2024) — Succession Resource Group, Inc. (SRG) published its eighth annual review of advisor acquisition activity, unveiling key trends for advisors interested in buying, selling, and succession planning. In this most recent data release, SRG reported on 188 transactions representing more than $25 billion in assets under management. Despite a high-interest rate environment, the M&A market was driven by strong demand, access to capital, increasing valuations, and shifting seller preferences toward larger buyers with the ability to scale. The average RIA/recurring revenue multiple reached 3.02, highlighting a resilient and sustained M&A market.
Succession Resource Group Named a Finalist in the WealthManagement.com 2023 Industry Awards
Portland, OR (June 27, 2023) — Succession Resource Group (SRG), an M&A consulting firm that works nationwide with financial advisors, agents, and accountants, announced today that it has been named a Finalist in the WealthManagement.com 2023 Industry Award (the “Wealthies”) in the category of Succession/Ownership Transition Services Non Custodian/Broker Dealer category for its Annual Advisor M&A and Equity Update. The update is published at the beginning of Q1 and Q3 every year, with the 2023 January release based on the largest dataset to date, sharing the most sought-after intel, including historical and current RIA valuation multiples at a national/regional level, average deal structures, financing trends, KPIs based on size, and compensation data.
Succession Resource Group (SRG) Expands Core Team With Another Industry Expert
Julia Sexton, CVA, brings extensive industry experience in valuations, mergers, and teaming, expanding SRG’s capabilities.
Succession Resource Group (SRG) Expands Its Team of Specialized Experts with New Director of Valuations
SRG continues attracting top talent as the leading industry authority on succession planning, business valuations, deal structuring, equity management, death/disability planning, mergers, and acquisitions.
Succession Resource Group Celebrates Sale of Fee-Based Advisory Firm Through Seller Advocacy Program (SAP)
PORTLAND, Ore. (Aug. 10, 2022) – Succession Resource Group (SRG) is happy to report another successful sell-side transaction with the sale of an AdvisorNet advisory practice based in Arizona. The practice, with approximately $50 million in assets under management, was acquired by Epic Trust Financial Group, LLC (Epic Trust). Epic Trust is owned by Jeff Lewis, who after rigorous negotiations to find a “win-win,” navigated the deal to a successful close with the assistance of Kristen Grau and Aliza Perry from SRG’s Seller Advocacy team.
Succession Resource Group Announces Sale Of $65M AUM Ameriprise Franchise
PORTLAND, Ore. (August 10, 2022) – Succession Resource Group (SRG) is thrilled to announce the sale of a California advisory practice run by Ms. Amanda Johnson (Johnson). After weeks of communicating with SRG’s member database (one of the largest in the industry), combined with support from field leadership with Ameriprise, more than 140 buyers were interviewed from across the country. With a well-run practice of 173 clients, her Northern California practice quickly rose to the top of the charts for SRG, gaining interest from many of Ameriprise’s top franchises.
