We’re coming off an incredible year from mergers and acquisitions yet again. In fact, we closed out 2022 as one of our greatest ever for FP Transitions, and the same goes for Live Oak Bank. We took a moment to reconnect with James Hughes, SVP of Advisory Lending for Live Oak Bank, to break down the key areas advisors should consider before they enter the 2023 mergers and acquisitions environment.
Topics: Acquisition, M&A, Business Value, Deal Structure, Financing, Bank Financing, Buying & Selling, State of the Market, Next Generation, Valuation & Appraisal, "Buying, Selling, and Valuing Financial Practices", Sell and Stay™, Trends
Despite the continued surge of wealth management M&A activity, one surprising fact remains: most of these market participants are engaging in a transaction for the very first time. While there are aggregators and larger RIAs that will continue to build up their business through strategic acquisitions, the majority of today’s deals spark from a mutual attraction either from aligned competencies, or complementary competencies, that allow both firms to amplify their growth and sustainability.
According to James Fisher, Vice President of Mergers and Acquisitions at FP Transitions, “Many practices are looking to be acquired or merge with a larger business to spur growth, to benefit from economies of scale, to offload compliance and day-to-day operations, to increase bandwidth and offerings to clients, or to assist with the retirement of one or more senior owners/partners, among other reasons.”
Regardless of experience, it takes a lot of patience, communication, time, and expertise to navigate the entire deal process. For firms going through this, on any side of the table, negotiating and documenting the transaction can often be more time consuming than anyone anticipated, creating the perfect environment for an all-to-common problem: deal fatigue.
Topics: Selling Your Practice, Acquisition, M&A, Business Value, Deal Structure, Buying & Selling, Mergers
We just got back from Fort Lauderdale where we spoke at the WealthStack RIAEdge conference for WealthManagement.com. James Fisher, FP Transitions’ Vice President of M&A spoke with several advisors onsite. We wanted to take some of the questions that we received and see if we could answer them for our broader client base.
Topics: Selling Your Practice, Commentary, M&A, Business Value, Buying & Selling
Our summary of the independent advisory M&A market, including a look at real transaction data, context to help advisors understand what's driving the data, and an unbiased look at what's really going on out there.
Topics: Commentary, FP Transitions, M&A, Trends
2021 is just about behind us, and 2022 is knocking at the door. What are the 2022 trends in the financial planning advisory space that we consult? We had an opportunity to ask our experts what they see in their respective crystal balls...
Topics: Selling Your Practice, Acquisition, Multi-Generational Ownership, M&A, Business Value, Deal Structure, Financing, Bank Financing, Buying & Selling, State of the Market, Mergers, Tax Regulations, Building Your Team, Valuation & Appraisal, Transactions, Trends
Happy New Year!
More than ever, we look forward to 2021 with the sense of reset and resolution that comes with the changing of the calendar year. We can breathe a sigh of relief that we made it through the chaos and onslaught of 2020.
If we take a moment to look back before we look ahead, we can see just how far we’ve come and how resilient we’ve been as a community of global citizens, financial professionals, and business owners.
In terms of M&A activity, the financial services industry has held its ground despite the market downturn that came earlier in the year. This is a reflection of the shrewdness of professionals like yourself. In the face of market uncertainty, you rose to the challenge, adapted as necessary, and pushed forward.
Topics: M&A, State of the Market, FPT in the News
Today’s independent financial advisors face an endless array of opportunities (and challenges). The key is to identify impediments before they arise and to develop strategies for tackling the issues that present the greatest opportunities for improvement and growth.
There are four main challenges essential to the success of your business:
Topics: Compensation, Succession Planning, Acquisition, Business Growth, M&A, Next Generation, Talent Recruitment, Enterprise
Over the last ten years, increasing numbers of advisors have begun the process of creating sustainable businesses. Many advisors started out as a book or a practice—one-generational models. They took steps to create much more valuable, multi-generational businesses by focusing on enterprise strength and setting up or restructuring essential business structures.
The M&A marketplace is becoming increasingly competitive. Businesses need a strong value proposition to step away from the crowd. Owners who have taken steps to work on building their enterprises are in the best position to leverage their unique business aspects to access more growth opportunities and become successful acquirers or merger partners.
Topics: Succession Planning, Multi-Generational Ownership, Organizational Structure, Business Growth, M&A, Sustainability
Independent financial advisors face an almost overwhelming set of challenges, but with challenges come opportunities. Many of these challenges fall into areas of:
- Mergers & Acquisitions
- Growth & Profitability
- Talent Retention
- Succession Planning
These opportunities and challenges are often interrelated. Tackling one challenge often helps solve another, thereby strengthening your business in other ways. A successful acquisition is supported by a strong enterprise that is capable of handling exponential growth, and building a strong enterprise requires the incorporation of next generation talent. Retaining and nurturing next generation talent is made possible with the proper compensation systems, and maintaining an effective compensation system demands business profitability. Bottom-line profitability increases when it is properly balanced with top-line growth. Finally, to bring it all together, growth is supported by building a strong, sustainable enterprise.
In this new webcast, President and Founder David Grau Sr., JD, discusses the top challenges and opportunities of the profession and how they can be addressed using an end-to-end, integrated strategy.
View webcast clip below and click here to watch the full video.
Topics: Compensation, Succession Planning, M&A, Talent Recruitment, Equity Pathways, Enterprise
There has been a fair amount of talk over the past decades about consolidation in the financial services industry. Most of the white papers and articles addressing this concept have presented it in a negative light as though it signals the end of the lifestyle practices that dot the landscape in this profession. Industry regulation, growth, technology, fee compression, competition, and aging advisors forced smaller practices to consolidate just to survive. At least that was the working theory.
As the original organizers of the open marketplace for independent advisors seeking to sell or to acquire, we have a slightly different perspective on consolidation; we view it in a very positive light. Consolidation looks very different than what the prognosticators laid out decades ago. From our vantage point of working with businesses below $2 billion in AUM, we’ve observed the industry is indeed experiencing some consolidation, but not only due to acquisitions or roll-ups by companies like Focus Financial, United Capital, or Dynasty. The consolidation that we see every day is owners of stronger, sustainable enterprises acquiring smaller, one-generational books and practices.
Viewed in this light, how better to look after 250 clients or households when a single-owner advisory practice nears retirement than to find a very similarly structured business that can step in, take over, and provide for the staff members as well? This process works for the buyers, the sellers, and, most importantly, the clients.
Topics: Multi-Generational Ownership, Organizational Structure, Business Growth, M&A, Sustainability, Trends in Transactions Study