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Ladenburg aims to help advisors navigate red-hot M&A market

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Ladenburg Thalmann’s new head of practice management has launched a coaching and succession planning program for the network’s 4,300 advisors amid a glut of M&A deals and similar offerings by rivals.

Advisors of the firm’s five independent broker-dealer subsidiaries who are interested in pursuing M&A deals now have access to six coaches providing consultations on valuation, transaction structure, third-party financing options and other services, Ladenburg announced on Aug. 16.

Like rival IBD network Advisor Group’s My Succession Plan program, Ladenburg also hopes to match prospective sellers and buyers through a website featuring advisory practice listings. While such succession-fueled M&A deals are helping to fuel record numbers of acquisitions, they often go unreported.

For example, advisors Steve Serati and Lee Neumann of Millenia Investments, a practice with Ladenburg subsidiary Securities Service Network, have purchased at least 15 firms in the past 10 years. Cetera Financial Group, another competitor, has facilitated more than 250 tuck-in deals since 2015.

LPL Financial CEO Dan Arnold also recently announced that a new virtual CFO tool will connect LPL advisors with financing for expansion or acquisitions. The deluge of activity, coupled with bull returns in equity markets, are prompting concerns about an overheated M&A environment.

Kirk Hulett took on a new role leading practice management at Miami-based Ladenburg in late June, in addition to his existing similar position at subsidiary Securities America. The new program unifies several services, which the IBD network has been offering for several years, together in one place, Hulett says.

“It’s the hot topic among advisors right now,” Hulett says, citing education through coaching, webinars and other training as a key goal. “Right now, when a quality practice goes up for sale, you’re going to find there’s quite a number of interested buyers. Those are different from prepared buyers.”

The combined amount across the top 10 firms has jumped 37% to $385.3 million over the past three years.
July 9

The network has tapped two succession-planning and acquisition coaches and four other experienced business coaches to support what it calls the succession, continuity and acquisitions platform. The team will work directly with advisors and hold in-depth sessions at the firms’ annual conferences.

Advisors should approach prospective sellers carefully, according to Titus Wealth Management’s Eric Aanes, who says his LPL-affiliated hybrid RIA balked at the “final hour” of a deal to buy a $35M practice this year over concerns about the price, regulatory issues and the retention of the practice’s clients.

The ease of financing under Small Business Administration loans with longer 10-year terms, along with nearly a decade of growth in the stock market, should make advisors leery of overpaying, Aanes says. Retention of the selling firm’s clients should also loom large in their thinking on the price, he adds.

“More than ever before, if you’re a buyer you need to rely on long-term relationships that the seller has had with clients. Our philosophy is looking for advisors that have had long-term relationships with clients, typically 15 to 20 years. That’s going to breed some retention,” Aanes says. “We’re looking for people with gray hair and looking to match them up with advisors that have capacity.”

Serati and Neumann have also vetoed dozens of deals over the years, and Hulett says he wants to help advisors who are buyers become more-prepared buyers. The coaching and training are free, while the firm’s valuation analyses will cost about $200 for advisors considering selling off their practices.

“It’s education,” Hulett says. “This is not an area where advisors have necessarily built up a great deal of expertise on how to most effectively exit the business.”

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