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Succession Resource Group is a boutique succession consulting firm based in the Pacific Northwest, serving clients across the country. SRG was founded by David Grau Jr., MBA in 2012 after nearly a decade of helping advisors with valuation and succession planning. SRG's team of experts leverage their industry expertise, combined with best-in-class resources, to help advisors, agents, and accountants manage the equity in their businesses...

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3 min read

2015 Advisor Merger & Acquisitions Data Press Release

Apr 12, 2016 7:00:38 AM

(PORTLAND, OR — April 12, 2016) Succession Resource Group, Inc. (SRG) published its second annual review of advisor acquisition activity, recapping 2015 data highlights and trends, drawing on more than $31 million dollars in third-party sales. SRG presented its findings to a live audience in its presentation titled, “2015 Financial Advisor Merger & Acquisition Annual Review” providing the status of the macro environment for deals completed in 2015 (excluding data from internal succession plans) for independent Registered Investment Advisors and Registered Representatives selling for less than $10 million.

The average value of an advisor practice has been increasing, dating back to the early 2000s, with 2015 deals proving no exception. The average gross recurring revenue multiple for 2015 rose 8.4% to 2.60, while the average transactional revenue multiple rose 8.9% to 1.10. These increases are some of the largest to date according to David Grau Jr., MBA, President of Succession Resource Group. He went on to say, “Given the aging advisor population, combined with the ever increasing percentage of advisors selling their practice year-over-year, one would expect to see values at least level out, if not start to pull back slightly.” The increase in values is due in large part to the increased lending options available to advisors, combined with the number of advisors preparing their business for sale years in advance. In the last three years, lenders have entered the market for advisor deals and become a more attractive alternative to seller financing. In 2015, 62% of deals used third-party lending, up from 48% in 2014, and a material change from the 5% in 2013. The increased use of bank financing caused the average down payment for an advisors practice to rise to 54%. “Seller financing has consistently ranged from a 4 and 5 year payback, while most bank financing is paid back over 10 years. Doubling the time a buyer has to pay the deal off has increased their purchasing power and is a main reason values increased so dramatically in 2015,” according to Grau Jr. He went on to say, “It’s similar to buying a home – if your typical loan has always been 30 years, and suddenly everyone has the option of a 60 year loan – for better or worse, you would see the average home value increase and the size of homes purchased increase. That is what is happening in the advisor space. The deals cash flow better on a ten-year payback, even if the buyer pays a premium for the practice.”

In addition to values and average down payments increasing, there was a marked increase in deals done between a buyer and seller on the same broker-dealer (BD) or custodial platform. Of the deals in 2015, 76% were done between advisors/representatives with the same BD/custodian. While these deals have higher client/revenue retention rates (increasing values), sellers also limit their market of potential buyers (decreasing the value). Buyers and sellers with a large national BD/custodian that sold intra-network received a 3.5% premium overall, while those with smaller networks saw a much more varied result, typically producing lower than average values due to the reduced pool of potential buyers. The increase in intra-network deals is due to the advanced planning now taking place in the industry, where advisors are now beginning to plan for the sale of their business 3-5 years prior to retirement, allowing them to make changes if necessary to find a qualified successor before they are ready to retire, or develop an internal succession plan with their team/partners. In support of this advance planning and awareness, SRG began a series of succession focused events, hosting 34 in-person Succession Workshops around the country in 2015, with more than 30 workshops scheduled in 2016 nationwide. “Every advisor is going to eventually leave their business – like it or not,” said Erik Pahlow, Senior Vice President at SRG. “Based on industry data, we expect at least one-third of the current advisors are not going to be here in the next 10 years, certainly not on a full-time basis. SRG is traveling the country to share best practices and raise awareness of the power and importance of succession planning for the independent advisor and practical strategies for putting a plan in place.”

About Succession Resource Group

Based in Portland, Oregon, Succession Resource Group, Inc. is a boutique consulting firm committed to helping financial advisors with their acquisition and succession needs. Founded and led by David Grau Jr., MBA, a succession planning consultant for more than a decade working with financial professionals, SRG provides turnkey customized acquisition and succession planning solutions nationwide, helping both individuals as well as providing firm-wide solutions for broker-dealers and custodians. SRG’s suite of services includes business valuation, business structuring and equity compensation strategies, talent development, contingency planning, acquisition support, deal support (including personal consulting, deal structuring, tax strategies, checklists, transition packet, and comprehensive customizable form contracts), succession planning, and personalized consulting.

For more information on Succession Resource Group visit

Contact: Nicole Sinclair, Corporate Liaison & Events Coordinator | Phone: (503) 427-9910 ext. 2  | Email:

Download 2015 M&A Press Release »

David Pan

Written by David Pan