Citywire USA: Behind Creative Planning’s purchase of Coe Financial Services
By: Jake MartinPublishing Date: May 20, 2020 How a spousal push, and a geographical pull, helped a deal come together Deb wanted him to sell. Long before Richard Coe turned 70 last year, his wife had been ‘strongly advocating’ for his retirement. Coe – who founded his namesake firm in 1983, loved his career and knew nothing about selling a business – was slow to proceed. By the time he sold Coe Financial Services, a Wichita, Kansas-based RIA with about $126m in AUM, his outlook had completely changed. ‘I went from reluctance to acceptance to, now, excitement,’ he said. Trusting the process Coe used RIA consultant Succession Resource Group (SRG), based in Portland, Oregon, to help with the sale process. ‘That kept me out of the emotional side of the negotiating,’ he said. SRG narrowed a list of more than 50 interested parties down to 10 before Coe got involved. The seven finalists ranged from very large to very small. On the small side, there was a Wichita-based advisor in his 30s who left a favorable impression on Coe and his wife. ‘We thought he would operate similarly, in many ways, to how I’ve operated,’ Coe said. But although the conversations went well, an offer did not result. ‘I can understand why someone might get a little reluctant with the market going crazy,’ Coe added. Nonetheless, Coe did get three ‘very attractive’ offers. ‘I cared about financial planning emphasis, likely investment results and the likely client experience,’ Coe said. One of the larger bidders, Creative Planning, checked all those boxes. Personal touch SRG chief executive David Grau said that Creative Planning also distinguished itself from other large firms by having CEO Peter Mallouk, rather than a subordinate, at the deal table. Mallouk said that after an initial ‘checklist’ talk with one of his colleagues, potential sellers deal directly with him. ‘There’s no M&A team, at all,’ he said. ‘It’s me talking with the principals and key team members of the firm, and I also make sure to meet all the employees before a deal is signed.’ From Creative Planning’s perspective, geography was a big factor behind the purchase. Creative Planning already had clients in the Wichita area, but they were covered by a group of advisors working out of the company’s Overland Park, Kansas headquarters. Mallouk said that extending physically into Wichita is an opportunity to ‘localize’ services while testing out a secondary market close to Creative Planning’s home base. However, there was a hitch. Coe wanted to orchestrate a quick exit. It was Mallouk’s first time working with an owner who wanted to exit in less than a year. ‘All of our other deals have been owners who want to stay and continue to grow,’ he said. However, Coe’s timeline aligned with Mallouk’s desire to promote a financial planner from the Wichita area to a wealth manager position. Adding Coe’s office gave Mallouk the perfect outpost to dispatch his new manager. Meanwhile, Coe agreed to stay on for a three-month transition period that will come to an end in mid-June. Another advisor and administrative staffer at his practice will continue working at Creative Planning. With everything set, even the economic turmoil and market crash caused by the Covid-19 pandemic didn’t derail the deal. Early in the process, Mallouk told Coe: ‘We will close quickly, within a week, if we have an agreement.’ ‘I’m thinking, “Wow,”’ Coe said. ‘In the midst of all that was going on in the market, to have a firm that was able to close within a week, that was very significant to me.’ Disclaimer This article was first published by Jake Martin. The original article can be found here. All rights to the original content are held by Citywire.
Citywire USA: Deal structures shift to give sellers more certainty
By: Jake MartinPublishing Date: July 23, 2020 Just 25% of deals in 2020 have contained a clawback feature, down from 67% in 2019, according to RIA consultancy Succession Resource Group. RIA sellers are trading higher values on their firms for less risk in M&A transactions so far in 2020, according to consultancy Succession Resource Group (SRG). The search for certainty has resulted in a sharp reduction in deals with contingencies and clawback features since the end of 2019, the Lake Oswego, Oregon firm said in a recent M&A outlook report. While values dropped despite initial expectations for a ‘strong’ 2020, SRG found that just 25% of deals this year have contained a clawback feature, down from 67% of deals in 2019. Meanwhile, 50% of transactions were all-cash deals. SRG helps financial services firms and professionals value, buy, and sell their businesses, as well as plan for succession and long-range transition of ownership. The firm’s RIA clients typically have $1bn or below in assets under management. Despite a short-term decline in revenue through June, values for RIA firms remained consistent, dropping less than 1% through the first half of 2020, the firm said. The average multiple of revenue of 2.72x in 2019 slipped to 2.70x through the end of the second quarter of 2020. SRG said the impact of the Covid-19 pandemic on advisor revenues ‘rebounded much quicker than initially anticipated,’ but that the market volatility will likely serve as a catalyst for advisors who were considering a sale at any point in the next 1-3 years. Kristen Grau, executive vice president of SRG, said she anticipates increased deal volume as early as this summer based not just on the pandemic but increased compliance challenges (Regulation Best Interest, for example), the ‘graying of the industry’ and aging clients, as well as a lack of succession planning. According to SRG, the average advisor age is 55 while the average age of an RIA seller is currently 63. Meanwhile, going into the pandemic, 33% of advisors already expected to retire in the next decade. Brian Lauzon, managing director at investment bank InCap Group, said there continues to be an ‘aggressive appetite’ for acquisitions and that multiples have remained steady for RIA firms in the range of $400m to $3bn in AUM. ‘Leading up to Covid, earn-out periods were shortening and it wasn’t unusual to see a deal with a one- or two-year earn-out,’ Lauzon said. ‘Currently — and we believe going forward — we expect earn-out periods to return to historical norms of three to four years.’ For InCap’s end of the market, Lauzon said all-cash deals have ‘historically been rare’ and will likely continue to be so for the foreseeable future. Disclaimer This article was first published by Jake Martin. The original article can be found here. All rights to the original content are held by Citywire.
RIABiz: Focus Financial CEO pumps brakes hard on M&A market, waiting for a return to ‘normal’ — and buyers of Focus stock bid up price as debt ratio improves
By: Charles Paikert Publishing Date: August 24, 2020 Focus Financial’s deal pipeline is being squeezed this year by the COVID-19 pandemic and soaring RIA multiples, but CEO Rudy Adolf says Focus has the discipline –and the cash–to stick to its business model until the market “normalizes.” When, and if, that happens are big questions at the moment–and whether the new normal will be anything like the old normal isn’t guaranteed. Those questions were central to analysts during the company’s second quarter 2020 earnings call. Adolf used the word “normal” or “normalize” in a recurring mantra on the call, but a quick reversion to the mean may be wishful thinking, says Karl Heckenberg, CEO of Emigrant Partners and Fiduciary Network. “Multiples of six- to seven-times earnings haven’t been ‘normal’ for several years,” he says, “A billion-dollar firm that’s growing is going to get a multiple of at least ten, if not closer to 11.” Adolf didn’t state what a normal market looks like to him, notes Matt Crow, president of Memphis-based M&A valuation firm Mercer Capital. “If RIA valuations are too high, and Focus’s multiple is around 12 or 13, then what’s ‘normal’ for Focus?” So far, Focus has completed only eight deals this year, adding two partner firms and six tuck-ins. Last year at this time, Focus and its partners had already made 21 transactions on their way to a year-end total of 34, the most in the industry. Still, Adolf is willing to sit tight on his business model–and a mountain of cash–until the market turns his way. “We absolutely are committed to our minimum IRR [internal rate of return] target of 20%, which means we continue to be very selective. And of course, our multiple discipline speaks for itself,” Adolf told analysts. “Quite frankly, discipline is our middle name, and this has made us the largest player in this industry,” he reminded analysts. Muted market Focus Chief Financial Officer Jim Shanahan acknowledged that Q2 M&A activity was “muted,” and the firm expects limited activity during Q3. “The pandemic resulted in an industry-wide decline in M&A as prospects prioritized client service over strategic transactions,” he noted. But the M&A market, overall, radically rebounded in July with 13 RIA deals totaling nearly $20 billion of AUM, the largest numbers in those categories for any July, according to Fidelity’s M&A transaction report. A “surge” of acquisitions following the COVID slump has already begun, says David DeVoe, an M&A consultant DeVoe & Co. Echelon Partners is predicting that the number of deals in 2020 will nearly match the record number recorded last year. But at what price? Adolf made clear the market is too rich for Focus, right now. He made no attempt to disguise his frustration about the price Canadian wealth manager CI Financial paid for the Chicago-area RIA Balasa Dinverno Foltz calling it “insane.” “It’s more like international players, sometimes private equity supported players that are — that seem to be way out of sync with typically industry multiples and in what they are doing right now.” The Canadian firm’s US wealth assets have swelled to about $11 billion over the course of a roughly six-month spending spree that landed three U.S RIAs, according to citywire. Indeed, a big factor in the market run-up is the entry of private-equity and deep-pocketed players in the RIA roll-up game. The trend was evident last September when Oak Hill Capital, a private equity firm with roots managing the Bass brothers’ family fortune, bought a stake in Mercer Advisors, the fast-growing Denver registered investment advisor aggregator. Mercer has made six major acquisitions to date this year, according to DeVoe. Goldman purchased United Capital, another RIA aggregator, for $750 million in July a year ago. See: Goldman Sachs readies splashy RIA retail debut as it (likely) adds $24-billion United Capital to $35-billion AUM Ayco for $59-billion 82 office behemoth; months after buying RIA lure from S&P Thomas H. Lee Partners (THL) is trying a different roll-up tack in financial advice — this time aggregating TAMPs that turn insurance reps into budding financial advisors. See: As Thomas H. Lee Partners asserts itself, Dave Pottruck steps down as chairman of HighTower’s board of directors The Boston-based private equity giant, which bought a majority stake (Jan. 2020) in AmeriLife, is the force behind Brookstone Capital Management’s roll up of FormulaFolios, a financial planning and automated portfolio management company. Hightower Advisors has either bought or made minority investments in five firms as has Creative Planning, a major RIA owned by Peter Mallouk, with private equity backing from General Atlantic. In June, Creative said it bought Sunrise Advisors, based in Leawood, Kan., and picked up about $700 million in client-managed assets, according to a news release. It was the firm’s seventh deal in 2020, according to InvestmentNews. Emigrant Partners has done four deals and Captrust, with backing from GTCR, has done three. And CI Financial has become a major new player, having bought three U.S RIAs this year after two last year. Private equity firms, for their part, have participated in 5% of all RIA merger transactions since 2013 and accounted for 26% of the deals as measured by assets under management, according to DeVoe. All of which begs a question: Will the new normal ever return to the old normal? Seller’s market As a pioneer in RIA M&A, it’s understandable that Adolf would long for his company’s youth when it could call the shots in doing deals, according to Matt Cooper, president of Beacon Pointe Advisors, another serial acquirer that earlier this year sold a minority interest to PE firm Abry Partners. “Focus was used to paying six- to seven- to eight-times EBITDA and [that] just doesn’t exist anymore for quality firms,” he says. The mismatch between supply and demand and increased competition “will begin to erode Focus’s M&A market share long-term,” David Grau Jr., CEO of M&A consulting firm Succession Resource Group, predicted earlier this year. Steve Levitt, managing director of Park Sutton Advisors, estimates there are 10 buyers for every seller. Grau believes
When it Comes to Growth, Location Matters
By: Tobias Salinger Published Date: August 6, 2025 When it comes to growth, location matters The role of geography in potential business opportunities for financial advisors can be hard to calculate in exact numbers, but the impact of location is changing in notable ways. Together, the rise of remote and hybrid offices across the industry and the continuing consolidation of registered investment advisory firms have altered the landscape of geographic expansion strategies and M&A deals. Both trends also add complexity to the question of, say, which states have the most potential assets under management in play. In 2024, out-of-state buyers completed a third of M&A transactions, according to the latest annual survey by deal consulting firm Succession Resource Group. The higher prices that those acquirers paid and the fact that out-of-state investors are “becoming more normal” reflect the altered geographic dynamics after the pandemic, said David Grau, the firm’s founder and CEO. In the past, “Very few retiring advisors or sellers would consider a buyer who was not within driving distance,” he said, citing the continuing rise in the share of transactions involving out-of-state buyers. “That’s an absurd figure in a professional service business.” To read the full article, please visit: https://www.financial-planning.com/news/how-geography-ties-into-wealth-management-growth Disclaimer This article was first published by Tobias Salinger. The original article can be found here. All rights to the original content are held by FinancialPlanning.com.
Empowering Independence | Building Self-Leading Teams with Saša Mirković (Ep. 25)
Watch the Replay Related Resources 2025 Advisor M&A Report Check Out our Press Release→ Succession Readiness Checklist Check Out the Checklist→ Selling Your Practice with Expert Advocacy Watch the Replay → Grab A Valuation We offer a variety of solutions and turnaround times to fit your needs. Join myCompass Our membership club grants you inside tips and opportunities to grow. Review our Seller Services We’re here to ensure you secure the best buyer, price and terms.
Practice Value Assessment Tool Overview
Whether you’re planning for succession, preparing to sell, or simply tracking your firm’s value over time, SRG’s Practice Value Assessment Tool (PVA Tool) gives you instant access to reliable valuation estimates—anytime, anywhere. Powered by real-world transaction data and backed by SRG’s expert M&A team, the PVA Tool is the only valuation engine built specifically for financial advisors. With just a few key inputs, users can model scenarios, export professional reports, and identify opportunities to increase firm value. Download the brochure to see how the PVA Tool brings speed, accuracy, and simplicity to your valuation process. Watch our PVA Tool demo. Please enable JavaScript in your browser to complete this form.Please enable JavaScript in your browser to complete this form. Name * FirstLast Phone Work Email *How Did You Hear About SRG? *— Select Choice —ConferenceDirect MailExisting/Past ClientGoogle AdWordsOtherReferralSocial MediaSeminar/WorkshopWebinarWebsite Download
Why SRG Delivers Real ROI
Please enable JavaScript in your browser to complete this form.Please enable JavaScript in your browser to complete this form. Name * FirstLast Phone Work Email *How Did You Hear About SRG? *— Select Choice —ConferenceDirect MailExisting/Past ClientGoogle AdWordsOtherReferralSocial MediaSeminar/WorkshopWebinarWebsite Download What’s the real ROI of hiring SRG? Our latest infographic breaks down why firms choose SRG, not just for answers, but for outcomes. From saving time and streamlining execution to gaining strategic clarity and confidence, SRG’s process is designed to reduce friction and deliver high-impact, sustainable results. Discover: Why SRG replaces the need for multiple consultants How we cut down delays and drive momentum What makes our deliverables actionable and built to last The ROI you gain from hiring a neutral, industry-savvy partner Whether you’re navigating a valuation, acquisition, succession or other transition, this visual guide shows how SRG helps you act decisively and move forward smarter. Download the infographic to see how we deliver real ROI at every step of your journey.
When Your Key Stakeholders Want to Help You Sell: 4 Things to Watch For
Please enable JavaScript in your browser to complete this form.Please enable JavaScript in your browser to complete this form. Name * FirstLast Phone Work Email *How Did You Hear About SRG? *— Select Choice —ConferenceDirect MailExisting/Past ClientGoogle AdWordsOtherReferralSocial MediaSeminar/WorkshopWebinarWebsite Download When your successor, internal buyer or home office wants to “help you sell,” it can be a win or a warning sign. Our latest infographic breaks down four critical considerations every advisor should weigh: Valuation – Will it be fair and accurate or biased toward the buyer? Structure – Are the deal terms designed to protect your best interests? Process – Who’s leading the timeline, and are they moving too fast or too slow? Representation – Do you have someone advocating solely for you? Whether you’re exploring internal succession or weighing a third-party offer, this infographic highlights the hidden risks and the steps you can take to protect your legacy. Download the infographic now to learn how SRG helps you navigate the sale on your terms.
Legal/Tax/M&A: Where Your Professionals Fit Into Your M&A and Succession Plan
Discover how to align the right professionals with the right phase of your M&A or succession plan — without wasting time or money. This session delivers hard-earned insights from hundreds of real-world advisory firm transitions. Watch the Replay Host Kristen Grau, CPA, CVA, CEPA Executive Vice President Paper-plane Linkedin-in Host Todd Fulks, JD, BFA
Contingency Planning FAQ
What is a contingency plan? A contingency plan is an agreement between two or more advisors designed to protect your business in case of your death, disability (temporary or permanent), loss of license, and possibly even retirement (although most plans do not deal with succession planning). There are a variety of plan types to solve for these issues: