Investment Management

December 16, 2019

WHITEPAPER | Succession Planning for Investment Management Firms

Succession planning has been an area of increasing focus in the RIA industry, particularly given what many are calling a looming succession crisis. The demographics suggest that increased attention to succession planning is well warranted: a full 62% of RIAs are still led by their founders, and only about a quarter of them have non-founding shareholders. Yet when RIA principals were asked to rank their firm’s top priorities in 2019, developing a succession plan was ranked last. Fortunately, there are many viable options for RIA principals looking to exit the business.

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The Silent Risk in Many RIA Succession Plans
The Silent Risk in Many RIA Succession Plans
In this article we discuss four of the most common “silent risks” embedded in otherwise well-intentioned succession plans.
Internal vs. External Valuations for RIAs
Internal vs. External Valuations for RIAs
Internal and external RIA transactions often reflect different economics beneath the headline multiples. While external buyers may justify higher prices through synergies and lower cost of capital, internal transitions can strengthen succession, reduce key person risk, and enhance long-term value.
Who Should Value Your RIA?
Who Should Value Your RIA?

Valuation Expertise and Industry Experience Aren’t Mutually Exclusive

Most RIA valuations are routine and uncontroversial, which can make different experts seem interchangeable. But when a tax filing is challenged, a buy-sell agreement is triggered, or a court or regulator scrutinizes the work, valuation stops being an opinion and becomes evidence. In those moments, the question is no longer just the number—it’s whether the professional behind it is qualified to defend it.

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