M&A is all the rage these days — several specialists pointing out this year has had more than 100 deals in the financial advisory field to date. But what are some of the trends inside this development? A new study by Advisory Strategies and sponsored by BlackRock found some interesting new demands on buyers and new realities for sellers.
The six new demands for each group are related but different:
1) With 5.4% of advisory firms controlling 63.2% of AUM at the end of 2017, the study found RIA buyers need to decide if they want to compete through scale and inorganic growth or stick to the boutique approach. On the flip-side are the sellers, in which not all multiples rose the same. The top 0.5-1% of firms by AUM in the industry are commanding premium multiples, but often they had to accept specific structured deals to achieve the transaction.
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Ginger Szala
Ginger Szala is executive managing editor of Investment Advisor magazine. She covered the financial business and alternatives industry for 30 years while editor of Futures Magazine Group. MSJ Northwestern, BA University of Wisconsin-Madison. She is based in Chicago. Go Blackhawks!
