© 2020 Arizent. All rights reserved.

Successful M&A deals start with this question

invest podcast

RIAs should begin the selling process by visualizing their ideal situation, investment banker and consultant David DeVoe says in an episode of Financial Planning’s In|Vest Podcast.

With RIA M&A levels reaching new highs in each of the past six years in San Francisco-based DeVoe & Company’s regular “Deal Book” surveys, the firm’s founder says advisors have never had more options when it comes to finding a buyer or arranging for financing.

Listen or subscribe
The In|Vest Podcast on iTunes, Spotify or Google Play
Subscribe to Financial Planning's weekly In|Vest Insights newsletter
Sign up for free registration on the upper right corner of the website, then follow the link to subscribe to our newsletters.
Join us live
For more information about the In|Vest Conference, June 18-19 in New York, click here for registration info or apply to speak or demo.

The current flood of capital and record deal flow shows that RIAs have created stable, profitable businesses while serving their clients in a fiduciary capacity, he says. DeVoe finds that advisors who have made succession deals often wind up working longer than they intended before their full retirement. They have, in essence, created a new job for themselves upon closure, he says.

The advantageous market explains why RIA sellers ought to “take a big step back” for self examination before seeking out the potential buyers, DeVoe says.

“When we work with sellers — and we spend a lot of time working with sellers — we start the conversation with a white sheet of paper,” he says.

David DeVoe is a San Francisco-based RIA M&A investment banker and consultant.

“We encourage them to take some time and think about what is most important to them, think about what their optimal situation is — not even the buyer but the optimal situation. And there’s so much power to this: you are, quite literally, in the catbird seat in today’s environment. There are so many different sophisticated, well-run buyers in the marketplace that you can not only have your pick of, ‘I like this one better than that one’ but, more importantly, ‘This business model is better for what I seek to achieve as an organization.’ It’s interesting, we have to pull and nudge people to start with that white sheet of paper.”