RIA Valuation Insights

A weekly update on issues important to the Investment Management industry


RIA Consolidators Drive Record Deal Activity in 2019

Asset and Wealth Manager M&A Continues Decade-Long Upward Trend

Asset and wealth manager M&A continued at a rapid pace during the fourth quarter of 2019, rounding out a record year by many metrics.  Total deal count in 2019 rose 6% over 2018, reaching the highest level seen over the last decade.  While reported deal volume declined by 50% in 2019, this metric can be a less reliable indicator of transaction activity given the lack of disclosed deal terms and the influence of large transactions. In 2020, we expect several trends to continue as many of the forces that shaped the industry over the last decade remain in place. 

Industry Trends Margins and Compensation Wealth Management

Wealth Management: Then and Now

How the Wealth Management Industry has Transformed Over the Last Decade

As we enter the new decade, rather than taking time for self-reflection, we prefer to take a step back and reflect on the radical transformation of the wealth management industry over the last ten years. Wealth managers have been forced to adapt in order to maintain their client base and remain profitable, and while these changes have not been easy, they have transformed the industry into one that is more focused on its clients’ needs and better regulated to ensure the safety of its clients’ assets.

Industry Trends

All Classes of Investment Management Firms Outperformed the Market in Q4

2019 Was Also a Bull Market for the RIA Industry

As good as the fourth quarter was for the S&P, it was even better for the RIA industry. All classes of investment management firms bested the market, which was up 10% for the quarter. Continued gains in the equity markets have allowed these firms to more than recover from last year’s correction, and many of these businesses are now trading at or near all-time highs.

Asset Management

Will Your Succession be Successful?

A Few Things RIAs Need to Know

We’ve hesitated to put together a whitepaper on succession planning because so many people have already written excellent commentary on the topic. Nonetheless, when we surveyed what had been written about succession for RIAs, we didn’t see the kind of … Continued

Practice Management

Debt Financing for RIAs

How to Finance an Ownership Transition

As noted in a recent post, there are many viable options for RIA principals when it comes to succession planning.  One way to transition ownership while maintaining independence is to sell internally to key staff members.  The most obvious roadblock when planning for internal succession is pricing.  But once you establish a price, how does the next generation pay?  An internal transition of ownership typically requires debt and/or seller financing as it’s unlikely that the next generation is able or willing to purchase 100% ownership in a matter of months.  In this post, we consider the expanding options for RIAs seeking debt financing and the typical terms they can expect.


Private Equity’s Silent Push into the RIA Space

Is Private Equity the Solution to Your Succession Planning Needs?

Private equity pervades the RIA industry, but most of their recent interest is through consolidators or roll-up firms.  In this week’s post, we’ll discuss the implications of this trend and other considerations for RIA owners’ contemplating the PE route.

Current Events Wealth Management

Are Wealth Management Margins About to Get Buried?

SchwabiTrade isn’t the Only Threat to the Most Consistent Profit Stream in the RIA Community

It’s hard to see the advent of SchwabiTrade as a good thing for the RIA community – especially the wealth management community. If Schwab is looking to recapture margins from zero commission trading and low rates on sweep accounts, it need look no further than the ten thousand plus RIAs now in its eco-system.

Industry Trends Transactions

What Should You Expect as an RIA Buyer or Seller?

Advisor Growth Strategies’ New Study Offers Insights into RIA Deal Mechanics

RIA M&A has been a well-publicized topic in the industry. There was a record level of RIA M&A in 2018, and so far in 2019 there are no signs that deal pace is slowing down. Against this backdrop, a new study conducted by Advisor Growth Strategies (AGS) and sponsored by BlackRock provides some insight into the state of deal terms in the RIA M&A market from the perspective of both buyers and sellers. We’ve highlighted some of the key takeaways from the study in this week’s post.

Call Reports Practice Management

Q3 2019 Call Reports

Differentiated Strategies of Asset Managers, Wealth Managers, and RIA Consolidators

During Q3 2019, most classes of RIA stocks underperformed major equity markets, which are having their best year, so far at least, in more than two decades. In general, base fees for RIAs were up due to higher average AUM (driven by market growth), however, each sector experienced unique challenges. As we do every quarter, we take a look at some of the earnings commentary from investment management pacesetters to scope out the dominate trends.

Investment Management

Mercer Capital provides RIAs, trust companies, and investment consultants with corporate valuation, litigation support, transaction advisory, and related services