Successful M&A deals start with this question

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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.

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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.”

RIAs M&A Succession planning Business development Private equity fundraising Private equity firms Fintech David Devoe INVEST West 2020