RIA Valuation Insights

A weekly update on issues important to the Investment Management industry

Current Events Industry Trends

Where Are RIA Valuations Today?

Matt Crow's Podcast Interview with Mindy Diamond

This is our first blogpost in three weeks. As the Coronavirus pandemic set in across the United States, Mercer Capital adjusted to working remotely about as smoothly as I could have hoped. The RIA team here at Mercer Capital struggled to find appropriate topics to cover in our weekly blog. Regular “business as usual” topics seemed out of place, and writing about very current events, like the massive dislocations in the structure of markets, isn’t why our readers spend their precious minutes absorbing our blog. For a couple of weeks, it seemed better to say nothing than to say the wrong thing. Fortunately, Mindy Diamond of the financial advisory recruiting firm, Diamond Consulting, asked if I would help her with a podcast about the impact of the pandemic on RIA valuations and, consequently, on transaction activity.

If you don’t subscribe to the Diamond podcast, Mindy hosts the all-stars of the RIA universe like Shirl Penney, David Canter, Mark Tibergien, and Liz Nesvold. Mindy also throws in a few mere mortals such as myself for variety – and digs until she gets well past the talking points. I hope you enjoy listening to this as much as I enjoyed the interview.

Industry Trends Trust Companies

Trends with Independent Trust Companies

Independent trust companies are a growing segment of the trust industry.  While trust divisions of banks still represent about 84% of the trust industry, there’s been a trend towards independence that parallels that seen in the wealth management industry.  In this post, we highlight some of the trends impacting independent trust companies.

Industry Trends Trust Companies

Today’s Independent Trust Company

How Does Your Trust Company Measure Up?

As trusts have become more sophisticated, independent trust companies have become increasingly specialized with respect to trust administration.  Many independent trust companies today focus on specialized types of trusts or beneficiaries.  As part of this trend, trust companies are increasingly outsourcing investment management in order to focus on fiduciary issues. 

Current Events Industry Trends Transactions Wealth Management

Don’t Get Distracted by Franklin/Legg and MS/E-Trade

Creative Planning’s Minority Sale is the Most Consequential RIA Deal So Far in 2020

It’s hard to imagine, but the most significant piece of news for the RIA community so far this year happened less than three weeks ago and is already almost forgotten: Peter Mallouk sold a minority stake in his firm, Creative Planning, to private equity firm General Atlantic.  The transaction is easily one of the largest, if not the largest, minority transaction in the history of the RIA industry, and potentially provides a blueprint for others to follow.

Industry Trends

RIA “Comps” Don’t Always Tell the Same Story

Divergent Performances of LM, TROW, BEN, and AMG Show Industry’s Susceptibility to Company Specific Events Over Market Forces

Relying on comparable public company data in the valuation of your RIA can be tricky and the performance of the publics over the past 12 months bears that out. We don’t typically see a 40%+ increase in value (TROW) and a ~25% decline in a bull market (AMG) for two businesses in the same industry. So, it’s important to understand the impact of market forces but it’s more important to understand the unique nature of your business and what is in your control and what isn’t. This week’s post takes a deeper dive into this topic.

Transactions Wealth Management

Beauty is in the Eye of the Beholder

Drivers of Valuation in Wealth Management M&A

Fidelity recently published a study on M&A activity in the wealth management industry highlighting sellers’ ambitious expectations of the value of their firms Fidelity’s conclusion: sellers of investment management firms often “don’t entirely understand what drives valuation.” In this post we hope to provide insight to the owners of wealth management firms on how likely buyers value their firm.


Are Sponsor-Backed Initiatives Distorting RIA M&A?

Barbarians at the Gate 2 – Electric Boogaloo

Investment management is a great business.  Firms that don’t need to sell, don’t sell. If transaction activity is up, does this mean that more firms need to sell?  If pricing and deal terms are better, are the transactions available today really that much more attractive than those available a few years ago?  And is the culture of consolidation that has emerged in the RIA community sustainable?


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. 

Investment Management

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