The Angst of Selling an Advisory Firm

Advisors acknowledged that selling to an aggregator also comes with benefits, including the advantage of size and scale.

“Advisors looking for an acquirer are passionate about finding, first and foremost, a firm with human beings they can trust to shepherd them into the future,” said Bob Oros, CEO of HighTower, in releasing the study results. “While valuations, legal paperwork and negotiations are all necessary, what matters most is getting a read on the people and culture you’re joining. Have the acquirers taken the time to get to know how and why you started your business decades ago? Have they sought to distill and recognize the talents and strategies that led to your present success? Do they see your continued autonomy as a key strategy for organic growth?”

The study also found that:

• 45% of RIAs were anxious about losing or diluting their brand identity;
• 36% said they were worried clients would react negatively; and
• 32% expressed concern about having to change aspects of their investment approach.

“Ask yourself: Do I really like these people?” Oros said. “The end goal is to make sure you have found an acquirer that aligns with your culture and values. When those are aligned, trust and true partnership follow.”

During its shift over the past two years to an ownership model, HighTower has conducted several internal cash and equity transactions with existing HighTower advisors.

HighTower conducted four external M&A deals in 2019:

• Green Square Wealth Management - $2.6 billion AUA
• LourdMurray - $4.8 billion AUA
• Lexington Wealth Management - $1 billion AUA
• Schultz Collins - $1 billion AUA.

— Check out 6 Realities for RIA Buyers and Sellers in Today’s Market on ThinkAdvisor.