RIA Valuation Insights

August 19, 2020 Industry Trends

Financial Advisors, Tell Your Clients to Gift Now!

Lower Asset Values Provide an Opportunity for Tax-Efficient Wealth Transfers Before November’s Election

Last week we covered Joe Biden’s proposed estate tax changes and their impact on family wealth transfers if he gets elected in November.  Proper estate planning can mitigate the adverse effects of higher taxes on wealth transfers, but the window to do so may be closing if we have a regime change later this year.  Further, the demand (and associated cost) for estate planning services may go up significantly in November, so you need to apprise your clients of these potential changes before it’s too late.

August 10, 2020 Industry Trends

Estate Tax Planning May Be the Next Surprise for RIA Community

2020 Chicanery Never Ends

2020 has been full of surprises, and the third quarter is bringing more.  The persistence of the pandemic and the consequent economic strain on many has shifted political winds in favor of the minority party.  If these trendlines don’t roll over between now and November 3, we’ll have a new executive and legislative regime and, with it, a redirection of tax policy.  It’s not too early to start thinking about what impact certain legislative changes will have on the RIA industry, especially with regard to estate tax law.

August 3, 2020 Alternative Asset Managers

Outlook for Alternative Asset Managers During COVID-19

Despite the global pandemic, the long-term outlook for most alternative asset managers appears healthy due to strong investor interest and emerging opportunities caused by market dislocation. In the near term, however, managers with large exposure to highly affected industries, or those that have seen large asset outflows, are likely to see their valuations decline. Managers with less exposure to highly affected industries and those whose strategies and fundraising are poised to benefit from the current environment are likely to see valuations increase.

July 28, 2020 Transactions

Independent RIAs Drive M&A During Downturn

RIA M&A Amid COVID-19 (Part II)

The outlook for RIA M&A at the end of the first quarter was murky. As anticipated, previously announced deals in the final stages of negotiations did close despite COVID-19, but new deal activity slowed some in the second quarter. Interestingly, independent RIAs, rather than consolidators, drove much of this deal activity.

July 20, 2020 Industry Trends

RIAs Rally After Worst Quarter in Eleven Years

The Industry Is Now in a Bull Market Following March’s Sell-Off

It probably doesn’t feel like it, but most RIA stocks are up over the last year. Over this time, we’ve had two bull markets and one bear market in one of the most volatile twelve-month periods. Against this backdrop, we discuss recent market performance, implications for your RIA, and a potentially improving outlook.

July 14, 2020 Current Events

FULL Disclosure: The SBA Outs the Investment Management Industry’s Participation in the PPP

We spent some quality time with the SBA’s release of PPP borrower data to see what impact the program has had on the investment management industry. After scrubbing out some misclassified businesses, we found more than 2,400 program participants (RIAs, trust companies, financial planning firms, etc.) that borrowed at least $150,000 (a separate release covered smaller loans). Even though the borrower pool is relatively small (there are at least 10,000 RIAs that aren’t participating), the demographics of the pool are telling.

June 29, 2020 Trust Companies

Whitepaper Release: Valuing Independent Trust Companies

The situation giving rise to the need for a valuation could be one of the most important events of your professional career.  Familiarity with the various contexts in which your firm might be valued and with the valuation process and methodology itself can be advantageous when the situation arises.  To this end, we’ve prepared a whitepaper on the topic of valuing interests in independent trust companies. 

June 24, 2020 Current Events

What Market Volatility Means for your RIA

Is Volatility the New Normal?

If one thing has become clear, it’s that market volatility is here to stay – at least for a while. In this post, we explore what this volatility means for you and for your RIA.

June 15, 2020 Industry Trends

The Evolution of Rule-Based Valuation Metrics and Why They Still Don’t Work

One of our first blog posts addressed the fallacies of rule-based valuation measures in RIA transactions.  Our position hasn’t changed, but these so-called rules of thumb have certainly evolved over time.  In a recent podcast with Michael Kitces, industry transaction specialist Elizabeth Nesvold of Raymond James explains the history and rationale behind these changes.  For this week’s post we’ll discuss this evolution and why such measures are usually more misleading than meaningful.

June 9, 2020 Practice Management Wealth Management

Pandemic Practice Management Opportunities

RIAs are Taking Advantage of this Time to Revisit Shareholder Agreements

You’ll probably find that the “downtime” afforded by working remotely and traveling less is a perfect time to clean up some practice management issues, including your buy-sell agreement. So pull your shareholder agreement out and compare it to our whitepaper.