Transaction Advisory, Investment Management

August 7, 2017

What’s Got Our Eye

Current RIA Trends

This week, we’re sharing some recent media on trends in the RIA space.  We’ve blogged about asset flows, bank interest in the RIA space, the plight of active management, and the fiduciary rule, but these articles represent a deeper dive into each of these topics.
  • "ETFs, ETPs Record Robust Asset Flows in First Half"by Michael S. Fischer of InvestmentAdvisor. The march of passive products continued full force in June, which saw record inflows of $63.6 billion to ETFs and ETPs around the globe, bringing year-to-date inflows to an impressive $347.7 billion, compared to net inflows of only $123.6 billion in the first half of 2016.
  • "Switching From Wirehouse to RIA"by Michael Kitces. Amidst the wave of advisors transitioning from wirehouses to independent firms, Kitces takes fifteen minutes to discuss the factors advisors should examine when considering making the transition.
  • "Banks Gobbling up RIAs as Consolidator Field Shrinks"by Janet Levaux of Investment Advisor. Though the year-to-date number of transactions in the RIA M&A space is up over 10% from 2016, fewer transactions were seen in Q2 compared to Q1 and the average AUM of RIAs involved in these transactions has fallen to $700 million, compared to an average of $1 billion over the last four years. DeVoe & Co. attribute this trend to the falling number of consolidators in the business.
  • "ETFs Now Have $1 Trillion More Than Hedge Funds"by Sarah Krouse of The Wall Street Journal. Assets in ETFs first surpassed investment in hedge funds two years ago and have accelerated ever since as investors continue to shun active products.
  • "Active Can Be Fiduciary; The Value of an Advisor"by Bob Veres of Inside Information. Bob discusses his vision of an active manager’s role in a post fiduciary rule investment environment as the enforcement date draws nearer. He also explores the many ways active managers can add value to clients outside of traditional money management.
If you have valuation questions regarding your RIA firm or if you would like to continue any of the above discussion further, give us a call.

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When RIA Owners Disagree on Value
When RIA Owners Disagree on Value

Choosing the Appraiser, the Process, and the Rules of Engagement

Valuation disputes among RIA owners require more than a defensible appraisal—they also require a clear process for selecting a qualified, independent appraiser and establishing fair rules of engagement. Thoughtful dispute-resolution provisions can help parties reach a credible conclusion even when perspectives on value differ.
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Mercer Capital to Sponsor the Association of Trust Organizations 2026 Annual Meeting
Mercer Capital to Sponsor the Association of Trust Organizations 2026 Annual Meeting
Mercer Capital is pleased to sponsor the Association of Trust Organizations’ 2026 Annual Meeting, taking place September 21-23, 2026, at the Grand Hyatt Deer Valley in Park City, Utah. Matt Crow, Brooks Hamner, and Zach Milam will attend on behalf of the firm.The 2026 Annual Meeting is a 1.5-day conference designed exclusively for the trust industry and will feature more than 13 hours of roundtables, panels, and networking. One of the featured sessions is Tuesday afternoon’s Session VI, “What Makes a Trust Company Worth More? Building Value Before the Deal,” which will be moderated by Matt Crow. The panel will explore the factors that drive valuation, how buyers and sellers evaluate opportunities, and what firms can do today to maximize enterprise value.Matt Crow, CFA, ASA, is the CEO of Mercer Capital and leads the firm’s Investment Management Industry team. He works with RIAs, independent trust companies, broker-dealers, and investment consulting firms on valuation matters related to corporate planning and reorganization, transactions, employee stock ownership plans, tax issues, and intangible asset valuations. Matt is also a frequent contributor to Mercer Capital’s RIA Valuation Insights blog.Brooks Hamner, CFA, ASA, is a Senior Vice President and a senior member of Mercer Capital’s Investment Management Industry team. He provides valuation services to RIAs, independent trust companies, asset managers, wealth management firms, broker-dealers, and investment consultants, and he also advises clients buying or selling their business.Zach Milam, CFA, is a Vice President and a senior member of Mercer Capital’s Investment Management Industry team. He has experience in corporate planning and reorganizations, financial reporting, fairness opinions, litigation support, employee stock ownership plans, and estate and gift tax planning and compliance matters.Mercer Capital regularly works with RIAs, independent trust companies, broker-dealers, and other investment management clients on valuation and advisory matters, and the firm looks forward to connecting with attendees in Park City. Visit the conference website to learn more about this year’s Annual Meeting: https://trustorgs.com/annual-meeting/.
The Margin RIA Buyers Actually Underwrite
The Margin RIA Buyers Actually Underwrite

Why the Post-Closing Cost Structure Matters More Than the Historical Margin

RIA buyers often focus less on a seller’s historical margin than on the earnings the business can generate after closing under the buyer’s operating model. Differences in integration strategy, cost structure, and platform capabilities can lead buyers to underwrite materially different margins and values.
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