This week, our team attended Dimensional’s Deals and Succession Conference in Charlotte. As in prior years, the event brought together RIA principals, industry consultants, capital providers, and valuation professionals to discuss the evolving M&A landscape and internal succession planning strategies.
The tone this year felt slightly different. While deal activity remains robust and capital is still widely available, conversations were more nuanced. Growth quality, equity structure, leadership depth, and cultural alignment took center stage.
Below are our key takeaways from this year’s conference.
1. Talent Sustainability Is Driving Valuation
One theme echoed across multiple sessions: buyers are increasingly underwriting the durability of talent.
Speakers noted that equity structures and team alignment are no longer secondary considerations. In many cases, they are primary drivers of valuation. Firms with broad-based equity ownership and clear succession frameworks were described as more resilient, more scalable, and ultimately more valuable. One presenter cited research showing that firms with meaningful team equity participation experienced materially stronger valuation outcomes over time compared to firms where ownership remained concentrated.
Conversely, misalignment around next-generation equity, particularly undocumented promises, was highlighted as a recurring deal friction point. Buyers are increasingly unwilling to “inherit” unclear or informal arrangements. In fact, several panelists noted that a significant portion of current transactions involve cleaning up past succession commitments before a deal can move forward.
The message was clear: succession planning and equity design are no longer internal housekeeping matters. They directly influence enterprise value.
2. Organic Growth Still Commands a Premium
Despite record transaction volume and headline multiples, buyers continue to differentiate based on organic growth.
Several speakers emphasized that net new asset growth, excluding market appreciation and acquisitions, remains one of the most important valuation drivers. In premium transactions, buyers expect documented organic growth rates in the mid-to-high single digits. Firms unable to clearly isolate organic growth from market performance risk undermining their negotiating position.
Equally important was the distinction between headline multiples and realized economics. Panelists cautioned sellers against focusing solely on advertised EBITDA multiples, noting that deal structures often include rollover equity and earnouts that meaningfully affect true economic value.
In other words, growth quality matters more than ever, and clarity around that growth is essential.
3. Equity Structure Is Both a Growth Tool and a Risk Factor
Equity design, both internal and external, was a major topic throughout the conference.
Speakers discussed the growing use of profits interests and synthetic equity structures to align next-generation advisors in capital-light ways. While these tools can be powerful, they require thoughtful modeling at inception. Downside, base case, and upside scenarios should be clearly communicated to avoid misaligned expectations later.
Internal succession math also received attention. At certain valuation thresholds, next-generation partners may struggle to acquire meaningful ownership stakes without significant leverage. This dynamic is pushing more firms to consider hybrid approaches that combine internal equity programs with external capital partnerships.
The overarching takeaway: equity should be designed proactively, not reactively. Firms that start early retain optionality. Firms that wait may find themselves negotiating under pressure.
4. Culture and Integration Still Determine Success
While capital availability remains high, culture continues to be a primary deal-breaker.
One panel framed M&A through four phases, cause, consider, commit, and combine, emphasizing that most transaction risk emerges after closing. Integration is not simply an operational exercise; it is a human one.
Several presenters warned against “falling in love with the deal” before rigorously vetting cultural fit, leadership alignment, and governance structures. Sellers rolling equity were encouraged to conduct reverse due diligence, including speaking directly with other firms that previously joined the platform.
A consistent theme was the importance of clarity before communicating strategy broadly. Leadership alignment must precede transparency to avoid unnecessary anxiety among employees.
From our perspective, this reinforces a long-standing observation: successful transactions are rarely defined by financial engineering alone. They are defined by alignment, around leadership, governance, and client experience.
5. The Acquirer Landscape Is Expanding—But Not Homogenizing
The conference closed with a panel examining the current acquirer landscape. With over 100 unique acquirers active last year and the majority backed by private equity, the menu of options has expanded considerably.
However, panelists emphasized that not all capital is the same. Some platforms pursue full integration models, others operate hybrid approaches, and some minority investors provide growth capital without operational control. Sellers were encouraged to look beyond valuation and assess structure, governance rights, earnout mechanics, and cultural alignment.
One statistic that stood out: a small percentage of the largest RIAs now control a disproportionate share of industry assets. Scale brings optionality—but also new complexities in leadership, governance, and growth expectations.
The implication for firm owners is not that bigger is always better, but that clarity around long-term goals is critical. Growth for growth’s sake was repeatedly flagged as a red flag. Growth aligned with mission, talent development, and client value creation was viewed far more favorably.
Final Thoughts
If there was a unifying theme this year, it was intentionality.
Intentional equity design.
Intentional leadership development.
Intentional organic growth.
Intentional cultural alignment.
M&A remains an attractive lever for RIAs, and internal succession continues to be a viable path for many firms. But neither approach works well when pursued opportunistically or reactively.
As always, we appreciate Dimensional’s commitment to fostering thoughtful dialogue around these important issues. We encourage RIA principals to attend future conferences and continue engaging with peers on the strategic decisions that will shape the next generation of firms.
About Mercer Capital
We are a valuation and advisory firm organized according to industry specialization. Our Investment Management Team provides valuation, transaction, litigation, and consulting services to asset managers, wealth managers, independent trust companies, broker-dealers, PE firms, and alternative managers.