RIA Acquisition

August 27, 2024

by a searcher from Michigan State University - The Eli Broad College of Business in Michigan, USA

Hey Searchfund Community!

Curious if anyone has any insight, experience, commentary, etc., on acquiring an independent registered investment advisory firm? Anything would be helpful but I’d love to know: How you sourced the deal? What was the deal structure? What was the valuation/multiple paid? What was your transition and client retention strategy?

Please don’t hesitate to share any open thoughts, ideas, or questions of your own. Thanks

Reply by a searcher
from Southern Methodist University in St. Louis, MO, USA

Amazing businesses. Multiples have certainly increased. You’d be competing against some big aggregators. Would be tough to get into if not already in industry. Pay attention to SEC/FINRA requirements. Generally would want to earn any selling advisors out over a few years which would make SBA funding tough.

Reply by a searcher
from University of Virginia in Walla Walla, WA 99362, USA

Yeah, you should be prepared to pay 10-15x for an RIA. Incredibly expensive. You need to have a clear model to grow. Under a billion of AuM is sub-scale, so you have to be able to build it quickly.

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