Purchase Price Allocation, Investment Management

November 20, 2024

WHITEPAPER | Purchase Price Allocations for RIAs

There’s been a great deal of interest in RIA acquisitions in recent years from a diverse group of buyers ranging from consolidators, other RIAs, banks, diversified financial services companies, and private equity.These acquirers have been drawn to RIA acquisitions due to the high margins, recurring revenue, low capital needs, and sticky client bases that RIAs often offer.Following these transactions, acquirers are generally required under accounting standards to perform what is known as a purchase price allocation, or PPA.In this whitepaper, we describe the PPA process, including attributes unique to the investment management industry.

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The Valuation Penalty for Market-Driven Growth
The Valuation Penalty for Market-Driven Growth
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Organic Growth Is the New Scarcity Premium
Organic Growth Is the New Scarcity Premium
Organic growth is emerging as the most valuable differentiator in the RIA industry, offering evidence of a firm's ability to attract clients, generate revenue, and create enterprise value independent of market performance or acquisitions. Firms that build repeatable and transferable growth engines are increasingly positioned to command stronger valuations, succession outcomes, and transaction terms.
Why RIA Owners Often Wait Too Long to Sell
Why RIA Owners Often Wait Too Long to Sell

The Risk You Know

Many RIA owners delay selling because current conditions feel stable and the future feels uncertain. The risks may not be as balanced as they appear.

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