Gladstone Group Study Affirms the Sweet Spot Most Appealing to RIA Buyers Over the Next 12 Months
May 02 2024 - 2:00PM
Business Wire
“The Gladstone Prognosticator™” is the first
forward-looking mergers and acquisitions (M&A) research study,
providing firms with a consensus opinion on trends that will impact
RIA M&A
Gladstone Group, a leading specialist in financial services
mergers and acquisitions (M&A), strategic growth consulting,
and executive search, today announced the launch of its
forward-looking M&A research, The Gladstone Prognosticator™, at
its annual RIA M&A Conference. The inaugural study reveals that
wealth advisory firms with $500M to $1B in assets under management
(AUM) are the most attractive acquisition targets for the next 12
months with an overwhelming 97% of buyers indicating their strong
interest in this segment; the $100M-$500M sector is the second most
desirable at 73%. This highlights the immense opportunity before
firms in these AUM ranges as they are poised to capture the
attention of nearly all potential buyers in the market.
The study also sheds light on the evolving perception of the
hybrid business model, which combines fee and commission-based
services. While 47% of buyers expressed no interest in the hybrid
model, the majority (53%) either fully embrace it (30%) or are
amenable to supporting it (23%), provided that all new business is
fee-based. This reveals that although there is a clear preference
for fee-only business, most buyers are willing to accommodate the
hybrid model to some extent, signaling a shift in the industry's
approach to business structure.
"The Gladstone Prognosticator™ is a game-changer for RIAs to
navigate the complex M&A landscape," said Derek Bruton,
Gladstone Group’s Senior Managing Director. "With an astounding 97%
of buyers laser-focused on firms with $500M to $1B in AUM, it's
clear that this segment is the sweet spot for M&A activity in
the coming year. In addition to this finding, our study dives deep
into crucial aspects of the RIA M&A industry, including
transaction volume, leverage and equity preferences, and deal
terms, empowering firms to make informed decisions about their
future whether they're interested in buying, selling or
growing."
Other notable findings of the first Gladstone Prognosticator™
found that multiples, down payment percentages, and retention terms
are expected to remain at current levels, indicating a stable
market for advisory firms considering M&A transactions. This
underscores the importance of seizing the favorable deal terms
currently available in the market.
The annual Gladstone Prognosticator™ draws upon the expertise of
more than 100 leading aggregators, deal attorneys, lenders, and
industry consultants, ensuring a robust and reliable analysis of
RIA M&A trends.
“Knowledge is power, and The Gladstone Prognosticator™ is the
key to unlocking that power for RIAs,” said Dan Kreuter, Founder
and CEO of Gladstone Group. "Research that analyzes past mergers
and acquisitions is a history lesson. Advisors armed with knowledge
of what acquirers intend to do have a competitive advantage. Our
inaugural study's insights into the evolving perception of the
hybrid model and the stability of deal terms are just a few
examples of how The Gladstone Prognosticator™ is set to become an
essential tool for firms looking to stay ahead of the curve."
For more information about The Gladstone Prognosticator™,
including how to access the findings, contact us at
https://gstonellc.com/contact-us/.
About Gladstone Group
Gladstone Group Inc. specializes in Mergers & Acquisitions,
Strategic Consulting, Valuations, and Executive Search. Our
exclusive focus is on serving the wealth and investment management
community across the United States. For more information, visit
https://gstoneinc.com/.
The Gladstone Prognosticator is a trademark of and exclusively
owned by Gladstone Group Inc.
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Ali McCarthy ali@amplifyyourvoice.studio 219-801-0368