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  • Cammy Smith

RIA M&A: What to Consider

Organic growth can be difficult, especially in the bearish market we are currently experiencing. This explains why the number of RIA and Financial Advisory M&A deals has not decreased in the age of COVID, as reported by FP Transitions.[1] Now presents an especially great opportunity for RIA owners and buyers alike to learn and position for the future. Here are a few considerations to keep in mind:

Mutual Assessment

People often think of M&A as a buyer-seller relationship when in reality, it’s a buyer-buyer relationship. Even though you may be selling your business, you are still evaluating the larger firm based on their work design, economics, value proposition, culture, and scale. It’s about finding the right fit for your business and your clients therefore, the deal should be opportunistic for parties on both ends.


It is important to consider the scale of the buyer firm because it directly equates to the growth, liquidity, and expertise of your business. By joining a larger firm, the bandwidth of your resources expands, leading to better growth opportunities. Additionally, you no longer need to worry about managing the business therefore, taking care of liquidity-related concerns. And finally, if there is a client that is outside your comfort zone or beyond your breadth, there are plenty of other advisors and resources to step in and offer support. Therefore, scale is a key consideration when it comes to merging with another business.

Think Long-Term

In addition to considering the potential of your business with sizing up, take this time to self-reflect on the other needs of your business. You may not be in a position where forfeiting your business is essential––in fact, your business may be currently doing very well. But think long-term. Is your current trajectory sustainable? Do you have the right technology? Will you fall behind on the times? Is there a firm that is better positioned to take your business to the next level? Do you need a retirement path? These are questions that you, as a business owner, should be constantly asking yourself. M&A is not just a last resort option. It is an opportunity to get ahead and build better.

Start Now

For buyers, start your acquisition planning now–– it is never too early. M&A can be competitive as many firms understand that it as a fast and sufficient way to expand your practice without spending time and energy on finding new clients, thereby reducing total client acquisition cost. Form a roadmap to get your own house in order for acquisition readiness. By starting preliminary conversations early, as far as 36 months prior, you will not only stand out but have a leg up on competing buyers because you took the time to target certain firms and learn about their needs. After all, buying or selling a predictable revenue stream based upon a client relationship takes time. Starting early will help maximize business value on an exit or support successful implementation on the buy-side.

All in all, inorganic growth may be the best move to boost your practice’s top line. Regardless of why you are considering M&A, think through these considerations and begin asking yourself the smart questions.

If you need support developing your sale or acquisition readiness roadmap, Revive Consulting+ can help.

[1] The Sell and Stay® Approach: A Versatile Deal Structure Webinar, FP Transitions, May 5, 2020.


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