The market for registered investment advisors is so hot that all potential sellers need is $500 and the time it takes to fill out a form to get a look by the growing roster of acquirers.
The new setup comes from the Gladstone Group, an M&A deal shop based in Plymouth Meeting, Penn. The firm has rolled out Gladstone Connect to “democratize” access to M&A services for smaller RIAs that may be looking to sell but can’t afford the cost of hiring a banker.
“At a time when approximately 100,000 financial advisors are starting to sunset their practices, the industry requires a systematized and streamlined process, particularly for smaller firms,” Gladstone founder and CEO Dan Kreuter said via email.
Kreuter said Gladstone gets a lot of inquiries from “quality advisory practices that are too small for us to bank on a retained sell-side basis (which is the only way we work), combined with the fact that our buyers can’t commit their corporate business assessment resources for smaller firms.”
But he and the firm believe there are buyers “for everyone” and that sellers often do not see the best options for “their life’s work.”
According to another M&A shop, Marshberry, the second quarter saw 83 deals in the RIA space, the most publicly announced deals since the firm started tracking in 2021. In addition, the 182 deals announced since the start of the year are 16.7% higher than the 156 deals announced through the first half of 2024. Last year’s total deal count was 353, the most since Marshberry started recording.
The growth in deals has also brought a boom in M&A consultancies. But Krueter, who founded Gladstone in 2006 and rolled it up with his recruiting firm earlier this year, said the new project allowed him to “flex my creative muscles” by building a platform for the smaller sell-side players.
Potential sellers get access to a valuation calculator for free, and then, if they sign up to be placed on the platform, pay a $500 fee. If an interested buyer purchases the firm, it pays Gladstone a closing fee, and the seller has no more transaction costs. If a seller wants further, white-glove services during the process, their initial $500 fee will go toward those costs with Gladstone.
The information on the platform is confidential, but it is available to buyers who are selected through a “rigorous screening” from Gladstone at no cost. Those buyers must show at least $1 billion in assets under management and have acquired firms.
According to Marshberry’s M&A report, released July 11, Merit Financial, Carson Group and Mercer Advisors were the most active buyers in the second quarter of this year. Those RIA acquirers, which are all backed by private equity, made up 12.1% of wealth advisory transactions, with the top 10 making up 31.9% of total market activity.
“At the same time,” Marshberry M&A experts wrote in the report, “the data continues to show that the buyer market remains highly diverse, with a large number of firms each contributing to overall deal flow. …. M&A activity often accelerates later in the year, and rankings can shift meaningfully as more firms enter the market or expand their acquisition strategies.”
#Consultancy #Gladstone #Launches #RIA #Seller #Service