RIA Valuation Insights

May 16, 2025 Practice Management

Managing Your RIA’s Priorities

The Owner Strategy Triangle

Sometimes we come across an idea that is so good we’re jealous of the person or persons who developed it. The Owner Strategy Triangle is one such idea. Josh Baron and Rob Lachenauer are family business consultants who founded Banyan Global and saw a strategic need for family business owners to decide what they valued most between three options: liquidity, growth, and control. While the authors developed the Owner Strategy Triangle as a way to examine strategy for family businesses, we see useful applications for their framework for RIA leadership as well.

May 9, 2025 Practice Management

Succession Is a Process, Not an Event

Why RIA Owners Need to Plan Early and Continuously

Succession planning is often misunderstood as a one-time event—a moment when an RIA owner transitions leadership and exits the firm. In reality, succession is best viewed as a process, not a single event. It is a strategic, ongoing effort that requires continuous planning and preparation over many years. For RIA owners, the stakes are high: a well-executed succession plan not only ensures the firm’s longevity but also enhances its value, whether you ultimately transition internally or sell to an external party.

In this week’s post, we address the process of succession and the role of internal resources such as next-generation leadership, as well as how investing in these areas increases your firm’s value—regardless of whether you choose an internal or external transition.

May 2, 2025 Current Events Valuation

The Impact of Market Volatility on RIA Valuations

An Illustrative Example of the Dangers of Formula Pricing in a Buy-Sell Agreement

In this week’s post, we take a closer look at how market volatility impacts the valuation of RIAs. Specifically, we show an illustrative example of how it could affect the formula pricing valuation of a $1 billion AUM RIA that has 70% of its clients’ assets in the S&P 500 and 30% in a diversified bond fund. However, for RIAs looking to weather a bear market, we recommend focusing on what you can control, as it should pay off in the long run.

April 25, 2025 Current Events Wealth Management

Market Volatility and the Enduring Value of Wealth Management

Following a comparatively placid first quarter, this month hasn’t been kind to anyone working in investment management. Readers of this blog may be wondering what impact current market conditions have on the value of their firms. Specifically, given the current macro environment, is the value of your RIA impaired? The answer probably depends on who you ask and, more importantly, why you’re asking.

April 18, 2025 Industry Trends Transactions

RIA M&A Update: Q1 2025

M&A activity in the RIA industry, which had been trailing 2023 levels for much of 2024, experienced a surge in January. This spike set a new record for monthly deal volume, exceeding the high watermark set in October 2024, with Q1 2025 was a record-setting quarter for deal volume. In this week’s post, we review what Q1 2025 M&A data means for your RIA.

April 11, 2025 Asset Management Current Events Industry Trends

Asset Managers Underperform the S&P

Tariff Meltdown Presents Opportunity

Amid stabilizing interest rates and inflation, the asset management industry (and the stock market as a whole) experienced moderate growth over the past year. However,  our index of publicly traded asset management firms generally tracked the movement in the broader market, with stock prices for smaller asset managers (AUM under $250 billion) up 4.4% and large asset managers (AUM over $250 billion) up 7.2% over the year ended March 31, 2025, while the broader market (S&P 500) was up 8.5%. With recent tariff announcements instigating a market drawdown as investors brace for an ongoing trade war, what does this mean for RIAs? The prospective outlook for asset managers in the coming months will depend on a few factors, which we detail in this week’s post.

April 4, 2025 Industry Trends

RIA Market Update: Q1 2025

RIAs underperformed the S&P in Q1 2025, with alternative asset managers declining almost 20% after a year of outperformance. Year-over-year, traditional investment managers saw the strongest AUM growth, while alternative managers proved better at converting this growth to revenue. We explore further in our Q1 2025 Market Update.

March 28, 2025 Valuation

Webinar Replay: Understanding RIA Valuations

A Guide for Today's Market

In our latest webinar, Brooks K. Hamner, CFA, ASA and Zachary C. Milam, CFA explore the critical elements shaping RIA valuations in today’s market. They discuss the key factors influencing RIA valuations, the latest industry trends, methodologies for valuing RIAs, and best practices to maximize firm value. We hope you find it informative and helpful.

March 21, 2025 Valuation

What Drives RIA Value – Growth or Margin?

More of Both Is Best, but the Tradeoff Is Measurable

In motor racing, winning requires building a car with the best combination of speed and handling. There’s a tradeoff between them, as speed requires bigger motors, more structure, and larger tires and brakes, all of which add weight. In the early days of racing, most sports cars focused on either straight-line speed (Ferrari, Corvette) or maneuverability (Porsche, Lotus). Times have changed. Today, winning takes both. And in the RIA space, strong growth and big margins are hallmarks of a winning business.

March 14, 2025 Transactions Valuation

5 Takeaways from Dimensional Fund Advisors’ Deals & Succession Conference

Last week, Mercer Capital’s investment management team attended Dimensional Fund Advisors’ Deals and Succession conference at Dimensional’s offices in Charlotte, North Carolina. The event focused on the current M&A environment and best practices for internal succession planning and ownership expansion. In this week’s post, we share our five key takeaways from the conference.