RIA Valuation Insights

April 6, 2018 Industry Trends

Volatile First Quarter Brings Asset Management Industry Headwinds Back Into Focus

Publicly traded asset managers had a rough first quarter, as volatility returned to the market and major indices posted negative quarterly returns for the first time in over two years.  While the overall drop in the market was relatively modest, stock price declines of publicly traded asset managers were generally more significant. It is not surprising that most asset managers have underperformed during periods of declining markets, since the reverse was true during 2017, when most asset managers outperformed the major indices.

April 2, 2018 Industry Trends

Three Takeaways from the CFA Institute’s Wealth Management Conference in Los Angeles

Several topics were discussed at the CFA Institute’s Wealth Management Conference, most of which centered around financial planning, practice management, and servicing private clients with evolving needs and return requirements.  Though we weren’t able to attend all the sessions, we did pick up on a few themes from our discussions with the attendees and other exhibitors. In this week’s post, we further discuss those themes.

March 26, 2018 Current Events

The Impact of the 2017 Tax Cuts & Jobs Act on the Investment Management Industry

This whitepaper is a compilation of thoughts we have gathered in the early days of this new tax regime. We present what we think are the major issues that RIA partners should consider.

March 18, 2018 Current Events Transactions

Two Perspectives on RIA Transactions in the Wake of the Tax Bill

There is an argument to be made that the 2017 Tax Cut and Jobs Act is bullish for RIA M&A, but there is also a counter-argument. In this week’s post, we address both.

March 9, 2018 Current Events

Your RIA May Qualify for the QBI Deduction, But Don’t Get Your Hopes Up

The Tax Cuts and Jobs Act (TCJA) introduces the Qualified Business Income (QBI) deduction as a partial offset to the bill’s reduction in the relative tax efficiency of pass through entities (S corporations, limited liability companies, and partnerships) versus C corporations.  Still, many RIAs will not be eligible for the deduction, and those that do will have a lot to keep in mind as it pertains to reasonable compensation levels and investment income.  We’ll try to sort it all out for you in this week’s post.

March 2, 2018 Current Events Industry Trends

What We’re Reading about the Tax Bill

Most of the sector’s recent press has focused on the tax bill’s impact on RIAs, so in addition to our own writings on the matter, we’ve highlighted some of the more salient pieces we’ve come across regarding the tax bill as it relates to the asset management sector.

February 23, 2018 Current Events Practice Management

The Tax Bill Rendered Your Shareholder Agreement Obsolete

The Tax Cuts and Jobs Act has really shaken up the underlying economics of investment management firms and, with that, the value of those firms. As a consequence, many owners of RIAs have inaccurate ideas of what their firms are worth, and, worse than that, they have outmoded shareholder agreements suggesting the willingness to transact at inaccurate valuations.

February 16, 2018 Current Events

Q4 Call Reports

Triadic Effects of the New Tax Law

The Tax Cuts and Jobs Act has been especially beneficial to the RIA sector, as lower corporate tax rates has had a positive impact on equity markets, boosting AUM and earnings, which are now taxed at lower rates.  Many firms are still assessing the full impact of tax reform, but what is clear is that lower corporate tax rates in 2018 will give asset mangers increased flexibility in capital management, M&A activity, and technology investment.  As we do every quarter, we take a look at some of the earnings commentary of pacesetters in asset management to gain further insight into the challenges and opportunities developing in the industry.

February 12, 2018 Current Events Practice Management

What RIA Owners Need to Know About the New Tax Law

For this week’s post, we’re offering the slides and recording from our recent webinar on the tax bill’s impact on the investment management community.  On balance, we believe most RIAs are better off as a consequence of the legislation, but there are nuances to the “win.”

February 2, 2018 Current Events

S Corp RIAs Disadvantaged by the Tax Bill

New but Unimproved

We covered much of what we think the new tax bill will mean to RIA valuations in last week’s blogpost – and it’s mostly good news.  The “rest of the story” involves the bill’s impact on shareholder returns for RIAs structured as tax pass-thru entities (S corporations, LLCs, Partnerships), for which the news is not so buoyant.