Topic: Sell-Side Representation

10 Tips for Selling Your RIA

An RIA firm owner’s roadmap to increasing your firm’s value in a sustainable way that enhance your firm’s market value now and in the long-run. Succession Resource Group shares six ways firms can carve a path towards smarter growth, identifying levers for better business decisions that retain talented employees as well as ideal profit margins.

The Psychology of Dealmaking

Watch the Replay Seller Resources For Advisors Preparing to Sell Seller Readiness Guide → For Our Latest M&A Update 2024 Advisor Mid-Year M&A Update → Buyer Resources For Advisors Seeking to Acquire Practice Acquisition Checklist → 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.

Selling Your Advisory Practice: What Your Clients Need from You

You’ve decided to put your exit strategy in motion. Maybe you’ve identified a buyer, or you’re considering multiple successors who’ve expressed interest in your practice, or you just decided an hour ago that now is the time to sell. At whatever stage you’re in, your top priority is to protect your clients and deliver a smooth transition that they’ve come to expect after years of working with you.

SRG Off Script: RIA Tax Considerations with Succession and Selling

As an advisor, you know that selling/buying a business is a major step for any founder/owner. Between the valuation, timeline, cash flow analysis, deal structure, and contracts, it’s enough to make your head spin. But, one of the most overlooked parts of M&A and succession planning is the tax strategy and how to leverage it to your advantage. Date: Thursday, April 13th, 2023 Time: 11 a.m. PST / 1 p.m. CST In this SRG Off Script, we will answer your questions on the various tax considerations when selling a business or sharing equity. If you’ve ever wondered how to maximize the tax result in a sale/merger, how to get long-term capital gains, the nuances of family succession planning and taxes, or even just the right entity structure to minimize taxes, this is the session for you. Submit your question(s) at registration or live during the webinar! SRG Off Script is a monthly webinar series hosted by President David Grau Jr. David along with other industry experts provide insight and address questions related to all stages of managing a financial practice. Have a request for future SRG Off Script session topics? Let us know at registration or email marketing@successionresourcegroup.com Watch Recording Resources Download Presentation Deck → [White Paper]Sunset vs. Succession: Realizing the Value of a Career in Financial Advice [Blog Post]What is Phantom Equity and How is it Used? → [SRG Services]Succession Planning →Seller Advocacy →SecondLook™ →Deal Support → Learn more about SRG’s Selling & Succession services. Schedule your free consultation below! Presenters David Grau Jr., MBA President/Founder

Selling a Book of Business- Tips for Financial Advisors Planning an Exit

Thinking of Selling a Financial Planning Practice? If selling a financial planning practice is new to you… you’re not alone.Mergers and acquisitions in the wealth management space are expected to surge over the next 5–10 years—and for good reason. Over half of active financial advisors are over age 50, and many lack a formal succession plan. As retirements increase and deal volume continues to rise, consolidation is inevitable. (Curious about what’s driving M&A? Grab our 2025 Highlights Report) Other pressures—like rising taxes and interest rates, tighter regulations (think Reg BI), tech demands, and fee compression—are adding stress and shrinking margins. For many advisors, this creates a tipping point, prompting them to explore exit options or sell their book of business. In short: sellers will be plentiful, and timing will matter. Selling a Financial Planning Practice: The Process Selling your financial planning practice is more than just finding a buyer. It’s a strategic process that requires careful planning—from knowing what your book of business is worth to negotiating deal terms and navigating tax implications. To help you prepare, we’ve outlined key questions to ask, steps to follow, and what to expect even after the deal closes. Because selling your business isn’t the end—it’s the beginning of a thoughtful transition for your clients, too. When is the Right Time to Sell Your Book of Business? Timing is everything when it comes to selling your book of business—but the right time isn’t always obvious. Personal circumstances are rarely in proper alignment with market conditions. Simply “wanting out” does not necessarily mean that it is time to sell your book of business. If your revenue is declining, you just lost your largest client, or made any major internal changes, you may not get the value you are hoping for or expecting from the financial advisory practice you’ve built. Retirement is an easier scenario for many advisors. If you set a target date a few years into the future, you can take the necessary steps to ensure you have maximized the value of your financial practice and positioned yourself to attract the best suitors. Preparing Your Book of Business for Retirement Don’t let your client demographic lower your valuation—start planning for generational continuity now. Another priority for those last few years may be prospecting and on-boarding younger clients if you want to create an internal transition plan. Advisors who have worked in the industry long enough to be considering retirement generally have aging clients, specifically clients over the age of 70. While buyers expect an older clientele when buying a business from a retiring advisor, the specific age of clients and the concentration of assets with those older clients can have a detrimental impact if no multi-generational planning is happening. The key is to understand your book of business and the demographic early enough that you can do something about it. Beginning to do more generational planning with clients will not be an overnight success, but with time and focused effort, advisors have the ability to mitigate one of the primary concerns any buyer will have. It is also a good idea to find the technology you need to be able to track and show the age of your clients, which are engaged in multi-generational planning, what assets those clients have, and any potential roll-overs or new money that could come into the practice. What is Your Book of Business Worth? Before you name your price, here’s how buyers are actually sizing up your business. The two most common valuation methods for financial service businesses is either a market-based valuation using comparable transaction data, or an income-based valuation that focuses on the business’s ability to generate profits. Neither of these are the correct solution 100% of the time; determining which method is most appropriate is dependent on the circumstances and size of the parties involved. The valuation of a financial advisor book of business can be estimated using a revenue multiplier of trailing twelve-month revenue. The industry standard for RIAs or advisors with recurring revenue is generally between 1.6 and 4.4, but when buyers outnumber sellers by a factor of 75:1 in 2020, it is common to see a well-positioned practice that has been prepped for sale, to exceed 3.0x on their recurring revenue. (Curious about what’s driving M&A? Grab our 2025 Highlights Report) Another method used for estimating value is an earnings multiplier (e.g., multiple of EBITDA, EBOC, EBIT, SDE, etc.). Serious buyers will want to conduct an actual valuation as well as take a deep dive into operational costs and profit margins. Even solo advisors have expenses, but the question remains, will you be assuming those expenses? If you will be assuming the seller’s overhead, and it is more reasonable to use a valuation method that focuses on profitability versus a value of the top-line revenue. When using this method, the industry standard for valuation is 4 to 8 times the annual earnings, including reasonable owner’s compensation. Regardless of the method used to determine business valuation, buyers will also factor in future cash flow projections, client retention rates, current fee structure, and the estimated valuation of closest competitors. Solid numbers in each of these areas could increase the sale price. How Can Advisors Maximize the Value of a Book of Business? Multipliers do not tell the entire story. Granted, revenue and profits are the most relevant variables in calculating the value of a book of business, but there are other actions the financial advisor can take to boost (or diminish) the asking price. A few of the key performance indicators that advisors have the ability to influence and should therefore monitor are as follows: Revenue mix – The most valuable revenue sources are those that are consistent and recurring, such as fees, trails, 12-b1s, renewals, and financial planning. While a simple fee-only RIA is certainly attractive and simple for a buyer to acquire, more diversified revenue sources often result in higher overall values paid. The most valuable of the recurring income sources

6 Major Cost Considerations to Sell Your Business

Selling your business is not only a difficult decision to make, but it can often be a costly one if not done correctly and objectively. And while the particular path you choose for your exit will inevitably vary, it is important to understand who will help you in that process, in what capacity, and what responsibilities you have as an owner. If you are thinking of selling your business or planning to sell in the future, here are the costs you should consider.

Should I Stay or Should I Go?

The market for advisor practices was set to be a record year in 2020 based on closing 2019 out on a high note, with valuations and deal terms as good as they have ever been. Fast forward three months and COVID-19 has eroded all these gains and left many advisors reeling and re-evaluating. As an advisor thinking of phasing out over the next few months or years, you are probably thinking, “Great, now what?”