Mercer Capital's RIA Valuation Insights

Recent Trends in Asset Management

This week, we’re sharing some recent media on trends in asset management, including the breakaway broker phenomenon, M&A activity, and the ongoing shift towards passive products.  Most industry observers foresee a continued flight from traditional wirehouses, an uptick in M&A activity spurred by increasing competitive pressures, and further fee pressure from passive products as we move towards a new equilibrium. 

Switching From Wirehouse to RIA – AUM And Revenue Requirements To Break Away

By Michael Kitces

We wrote last month about advisors shifting from traditional wirehouses to independent RIAs, and this post by industry consultant Michael Kitces offers a deep dive into the economics of the switch from an advisor’s perspective.

RIAs Poised to Land Wirehouse Recruits

By Dan Jamieson

Going independent doesn’t have to mean starting from scratch: wirehouse advisors are increasingly a recruiting channel for existing independent RIAs, according to this piece by industry observer Dan Jamieson.

Advisor Platform Comparison: Wirehouse vs RIA Aggregator vs Independent RIA

By Aaron Hattenbach

In this guest post which appeared on Michael Kitces’ blog, industry insider Aaron Hattenbach offers perspective gleaned from his own experience on the relative merits of wirehouses, RIA aggregators, and fully independent RIAs, each of which he has worked at.

UBS is ‘Constantly Approached’ About Asset-Management Unit

By Patrick Winters

This article from Bloomberg underscores the potential for a new wave of deals in the asset management space: UBS Chief Financial Officer Kirt Gardner indicates that UBS is “constantly approached” regarding its asset management unit.

Path to Growth: Why RIA firms leverage M&A as a growth strategy

By Christopher V. Gunderson

Increasing operational and compliance costs combined with downward fee pressure may be forcing consolidation in an industry where historically M&A activity has been sparse: according to a survey by InvestmentNews, 44% of RIAs plan to pursue M&A deals over the next five years.

Why Critics of Passive Investing Are Wrong

By: Kent Smetters

Somewhere there’s equilibrium between active and passive asset management, and wherever that equilibrium may be, we are not there yet according to this WSJ piece by University of Pennsylvania Wharton School Professor Kent Smetters.

As always, we are available to continue any of the above discussion further.  Don’t hesitate to call us. 

Last Chance to Register: What Is My RIA Worth?

Our most popular blog topic concerns the actual worth of investment management firms. As such, we thought it would be worthwhile to offer a webinar on the topic, and are planning to do so on Tuesday, October 3 from noon – 1:00pm (CST).

In the webinar, What Is My RIA Worth?, we will cover certain core issues such as:

  • How to normalize cash flow to determine the profitability of a RIA
  • How to compare different investment management firms to determine what risk-adjusted valuation multiples to apply
  • How to evaluate the growth potential of one firm relative to the industry or relative to other firms
  • What public company multiples say about how a private RIA is valued
  • Are industry transaction multiples a useful benchmark in valuing an investment management firm?

The webinar is free to partners and staff of investment management firms. You can find out more information and register below.


Mercer Capital’s RIA Valuation Insights Blog

The RIA Valuation Insights Blog presents a weekly update on issues important to the Asset Management Industry. Follow us on Twitter @RIA_Mercer.