Advisor Insights

A Lender’s View on Succession Planning

The investment advisory industry is dealing with an aging advisor force with an average age above 65. This reality has brought succession planning to the forefront of many discussions.  Advisors are constantly reminded of the need to put their own succession plan in place,yet less than 18% have a written succession plan. There are many…

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The Affordability of Phased Successions

Internal successions have become more popular in recent years. They provide the Founders and Senior Partners with many advantages, including a smoother transition into retirement and the chance to groom their successors in a way that preserves their legacy. In previous years, it was more common to see a single succession eventwhere the seller who…

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Leveling the Playing Field for Advisors

For any industry, there are barriers to entry to not only get started, but to also grow a business. In the financial advisory industry, one major barrier to entry and to growth has long been access to capital.  Traditional lenders rely on tangible collateral to secure loans and the value of financial advisory practices offers…

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The Most Overlooked Segment of the Advisor M&A Market

Large mergers and acquisitions dominate the industry news, leading many to believe that the bulk of transactions occur only at the top level. It also leads many to conclude that a mass consolidation is taking place and could be nearing its peak.  Therefore, M&A activity cannot continue to accelerate year-over-year at its current pace. The…

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Access To Capital is One Factor Driving Up Practice Values

In the last couple of years, the overall value of a financial advisory practice has increased. According to Todd Doherty, M&A Consultant for Advisor Legacy, there are a number of factors contributing to the rise in practice values, one of which is an increase in lending in the financial advisory space. “Interest rates are incredibly…

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3 Biggest Mistakes Advisors Make When Seeking An Acquisition Loan

It takes a great deal of planning and thought to do an acquisition and to do it well. There are many steps and many opportunities to make critical errors that can impact the deal. One area where many advisors make mistakes is in securing financing for their acquisition. Financing options for acquisitions have improved tremendously…

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3 Reasons to Refinance Your Acquisition Loan Now

Financial advisory firms looking to grow may find themselves cash strapped after an acquisition, especially if they utilized a high interest loan or a short-term seller note to finance the deal. While the primary purpose of refinancing is typically to secure a lower interest, there are a number of other reasons to consider refinancing. Consolidate…

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Five Keys to Getting More Deals Completed in 2021

As an active lender in the financial advisor space, we are always looking to leverage the expertise and insights of some of our key M&A partners. In this post, David Grau, CEO and Founder of Succession Resource Group has provided us with some key strategies and considerations for advisors looking to leverage acquisitions as a…

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Three Things Advisors Should Consider Before Buying A Financial Advisory Practice

A practice acquisition can be both an exciting and daunting experience for the first-time buyer. As with any major transaction, it’s important to do your homework and to take the time to learn the process, potential challenges, and what you need to have in place to make a successful transition. To aide in that process,…

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Buyer Protections During An Acquisition

Acquisitions are an excellent way to scale your financial practice and achieve rapid growth. As with any purchase, there is always the danger that something will go wrong. It’s good to hope for the best, but smart advisors know to also build certain protections into the deal in order to preserve their investment and maintain…

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One Thing You Should Do Before Structuring An Acquisition Deal

It’s always a good idea to do your homework before making a big purchase or entering into an agreement. It’s especially true when buying another financial advisory practice. Financing options for advisor acquisitions have improved significantly over the last several years. However, financing can also be an issue if you don’t take the right steps…

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How Personality Impacts Acquisitions

Competition for acquisition opportunities has remained stiff in the financial advisor space for several years. With multiple advisors vying for the same opportunities, sellers are able to look beyond the bid in order to select a truly “right fit” advisor for their succession. As a result, personality and “likability” continue to be the most important…

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A Great Source For Acquisitions

M&A activity in the financial advisor market has steadily increased over the last few years and understandably so. Acquisitions are an excellent way to quickly grow a practice. However, the supply of available practices for sale has not kept pace with demand creating stiff competition for practices among buyers. Many would be buyers concentrate their…

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The Importance Of Not Doing An Acquisition Alone

Many advisors are eager to grow through acquisitions. For those pursuing their first or even second acquisition, there are many blind spots that can create problems for advisors. Even if the issues don’t manifest right away, something an advisor doesn’t know to look for can show up later on and become a major financial and…

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Risks and Protections to Financing Partner Buy-Ins and Phased Successions

The financial advisor industry is rapidly growing. In tandem with that growth is a largely aging advisor force who must now look to next generation leaders to help carry the practice into the future. For many, an internal succession plan must rely on third-party financing so that junior advisors can bring the necessary capital to…

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An Overlooked Avenue of Growth For Financial Advisors

When it comes to growing a financial advisory firm, growth strategies usually land into two camps: organic and inorganic growth. Organic growth generally involves client prospecting and business development efforts while inorganic growth focuses on mergers and acquisitions. Between these two paths lies another overlooked avenue for growth for financial advisors – next generation leaders…

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Should You Choose Conventional or SBA for Financial Advisor Loans

As mentioned in a previous post, financial advisors now have options when it comes to financing growth for their firm. Lenders have increasingly become more aware of the market and are developing loan solutions to match the needs of financial advisors. Those loan products typically fall into one of two buckets: conventional loans or SBA…

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Options for Financing a Financial Advisor Acquisition

The acquisition landscape has changed tremendously for financial advisors over the last decade. As a relatively young and unique industry for traditional lenders, early acquisitions were provided with very few options in terms of financing and deal structure. These limitations created barriers not present in other industries. But as the industry has matured, advisors have…

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The Importance Of Shopping Around For Your Next Financial Advisor Loan

When it comes to major financial decisions, most advisors recognize the importance of surveying the market for all options and evaluating them to find the one that best fits your needs. However, we have seen many advisors secure a loan offer from a single lender and assume that what is true of one lender is…

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Should Advisors Get Financing Through Their Broker Dealer?

The relationship between an advisor and their broker dealer is a positive and mutually beneficial partnership. Broker dealers actively build resources and tools to help their advisors grow and it makes sense for advisors to leverage those resources—most of the time. Recently Wealth Management published an article advocating for financing an acquisition through your broker-dealer.…

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How the Value of a Financial Advisor Practice is Determined

There are many different methods advisors use to determine the value of their practice. Industry averages and rules of thumb may be useful for internal purposes. However, they often fall short of telling you exactly what your practice is worth and what influences that value. A formal valuation can give you an accurate picture of…

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Options for Structuring Advisor Acquisitions During the Coronavirus Market Dip

Fluctuating markets spurred by Covid fears have left many advisor acquisitions and internal successions in limbo. Challenging times call for ingenuity and a balanced approach to structuring deals that take into account the impact of the market on both the buyer’s and seller’s position. Although deals may look a little different right now, advisors still…

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How the Coronavirus Crisis will Impact Access to Credit for Financial Advisors

Over the past few months, the Coronavirus has made a significant impact on many industries, and especially financial markets. This in turn, has impacted both the earnings of financial advisors and the values of their businesses. We can’t say for sure how markets will act over the coming months, but we do expect to see…

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