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Mindy Diamond on Independence: Industry Update on M&A

The excitement around M&A activity has many financial advisors considering their future. Is independence the right path? And if you build an independent firm, who will buy it? Part 1 of this two-part episode compares and contrasts options, including recruitment deals and retire-in-place programs, and shares examples of breakaways whose firms were recently acquired and what made them attractive acquisitions.


M&A has been one of the hottest topics in wealth management over the past few years. And that comes as no surprise with both the number and size of deals rising year over year for nearly a decade. For example, the 307 deals in 2021 represented an increase of nearly 50% over the 205 deals in 2020. And 2022 is off to a strong start.

The excitement around this activity has many an advisor considering their future—whether they are employees looking at their firms’ retire-in-place programs; a younger advisor with their sights set on building for the long term; or an independent business owner looking to advance their business to the next level.

That is, they all have one thing in common: the desire to create an enterprise that will at some point garner the attention of acquirers with deep pockets.

Ultimately, they’re wondering, “If I build an independent firm, who will buy it?”

There’s a lot to unpack here, so much so that we’re dividing this into two parts. In this episode, we’ll talk about the potential, including:

  • A breakdown on valuations—and how they are derived;
  • Understanding EBITDA (earnings before interest, taxes, depreciation and amortization) and EBOC (earnings before owner compensation)—and how each impacts valuations;
  • Selling an independent practice vs. taking a recruitment deal—and why it might make sense to defer the upfront check; and
  • M&A vs. a retirement package—and how many advisors are opting to build their own retirement plan as independents.

Plus, Mindy and Louis share examples of breakaways whose firms were recently acquired, with some thoughts on what made them attractive acquisitions.

Then stay tuned for Part 2, where we’ll explore who the potential buyers are, what they are looking for and offer tips on how best to prepare your firm to obtain the highest valuations.

And be sure to download the M&A Readiness Assessment mentioned in these episodes.

Download: M&A Readiness Assessment

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Listen to more episodes of Mindy Diamond on Independence: A Podcast for Financial Advisors Considering Change.

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