Jamie Hopkins, Managing Partner of Wealth Solutions, Carson Group, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss the acquisition environment for RIA firms.
Carson Group works with advisors to help grow their business in a number of ways. Carson Group may make minority investments in advisory firms, acquire entire advisory firms, or work with advisors seeking to purchase other practices. CarsonCoaching.com has worked with 1,600 advisors to build a path forward and grow their practice.
Despite rising rates and market challenges, Hopkins states that mergers and acquisitions are still taking place in 2023, with valuation levels of banker-led deals the same or higher vs. 2022 levels. While deals are still happening, there may be fewer buyers than two years ago, as the big acquirers financed by debt have pulled back from new M&A activity.
Before advisors seek to sell their firm, they are encouraged to prepare it for sale and understand the valuation process. Hopkins notes that Carson Group will pass on an acquisition if the advisor doesn’t have a G2 (next generation) succession plan. Advisors should build talent and culture in their firms to make the practice sustainable and attractive to buyers. Once an advisor receives an offer for acquisition, they should evaluate not only the financial terms of the deal but also the culture and the sustainability of the acquiring firm.
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