The Buyer's Boardroom

Episode 27: Valuations - What is Your Practice Worth & How Will It Be Valued with Special Guest Kay Lynn MayhueHosts: Allen Darby & Jacqueline MartinezGuest: Kay Lynn Mayhue, President at Merit Financial Advisors Wealth management valuations are sitting near historic highs, but not every firm is valued the same. In this episode, Allen and Jaclyn break down where RIA valuations are today, what buyers are really paying for, and why deal structure matters just as much as the headline multiple.Current Wealth Management ValuationsThe market remains highly competitive, with pricing moving up over the last six months. Tune in to find out headline multiplesWhy the Headline Number Can Be MisleadingThe highest multiple is not always the cleanest offer. Buyers often separate the base business from future growth assumptions, which means a large headline offer may depend heavily on earn-outs, retention payments, or aggressive performance targets. Sellers need to understand what is guaranteed, what is contingent, and what has to happen after closing to receive the full value.What Buyers Are ScrutinizingOrganic growth has become one of the most important value drivers in the market. Firms with strong net new asset growth, team depth, and a credible next generation of leadership are commanding more buyer attention. On the other hand, concentration risk, weak succession planning, or a lack of reinvestment in the business can create friction in diligence and impact structure.Profitability Is Not Always What It SeemsStrong margins matter, but unusually high EBITDA margins can raise questions. Buyers may interpret extreme profitability as a sign that the firm has underinvested in technology, infrastructure, talent, or future growth. The best-positioned firms are not just profitable. They are scalable, durable, and built to keep growing after a transaction.Understanding Deal StructureMost transactions include a mix of cash, buyer equity, retention payments, and potential earn-outs. Closing payments often represent 60% to 80% of the base valuation, while additional consideration may depend on client retention or future growth. Employment agreements, restrictive covenants, non-competes, and non-solicits are also standard parts of the process.The Role of Team Depth and SuccessionFor owners who want to exit within a few years, a strong second-generation leadership team is critical. Buyers want confidence that client relationships, operations, and growth will continue after the founder steps back. Firms that wait too long to build that bench may find themselves with fewer options or more restrictive deal terms.The Coming Impact of AIAI is becoming a major strategic consideration for wealth management firms. Larger platforms are investing heavily in automation, operational efficiency, and AI-enabled infrastructure. Over time, firms that rely too heavily on manual processes may appear bloated or less scalable compared with buyers that have invested in technology.Timing the MarketOwners who think they may want to sell in the next two to five years should start preparing now. If the goal is to exit shortly after a transaction, the process should begin years in advance. The strongest outcomes usually come from firms that have already addressed growth, team, operations, succession, and client retention before going to market.Bottom LineValuations are strong, but buyers are becoming more selective. The firms that win premium outcomes are not just large or profitable. They have organic growth, durable teams, clean operations, thoughtful succession, and a clear story about why the business will continue to thrive after the deal closes.

In this episode of the Buyer’s Boardroom, Allen Darby and Jacqueline Martinez explore one of the more challenging operational dilemmas for sellers: how to deal with 1099 advisors. Here, they break down the myths and realities around the impact of 1099 advisors on firm’s value and provide strategies to optimize valuations. Nate Lenz of Concurrent joins as a special guest, offering insights from his personal experience as Co-Founder and CEO of a buyer in the space that has creatively solved for this situation. Together, they examine the best path forward. Join the Conversation: We invite you to share your thoughts on this approach. Email your reactions toboardroom@alarisacquisitions.com.

In this episode of the Buyers Boardroom, Allen Darby and Jacqueline Martinez delve into the traditional methods of sell-side advising in the wealth management space. Discover why they believe traditional financial auctions fall short in considering cultural fit and post-acquisition success. Instead, they advocate for a 'cultural conviction' approach that emphasizes extensive buyer-seller interaction to ensure a harmonious partnership. Drawing on their extensive experience and years of data collection on buyer models, they propose that this method not only fosters better long-term relationships but could also potentially lead to higher valuations. Join the Conversation: We invite you to share your thoughts on this approach. Email your reactions to boardroom@alarisacquisitions.com. Overview: The Problem with Financial Auctions: Financial auctions have long been the go-to method for sell-side advisors in the wealth management space. But is this the best mechanism to divest these kinds of assets? Allen and Jacqueline argue that it is not. Here's why: Psychological Manipulation: Financial auctions exploit human emotions and psychological drivers. Terms like "social proof," "time pressure," and "scarcity" are built into the auction process to artificially inflate offers. This can lead to what is known as the "winner's curse," where the highest bidder regrets their purchase after realizing they overpaid. Lack of Cultural Fit: The financial auction process prioritizes monetary bids over cultural alignment. Sellers and buyers get little to no time to assess if they're a good cultural fit, which is often cited by both parties as the most crucial aspect of a successful transaction. Inadequate Stakeholder Consideration: Beyond the buyer and seller, other stakeholders such as teams and clients are critically important. Financial auctions don’t adequately address the needs and concerns of these groups, leading to potential disruption and dissatisfaction post-acquisition. The Alternative: Cultural Conviction Process: So, what is the better way to match buyers and sellers in the wealth management industry? Allen introduces an alternative approach he calls "Cultural Conviction." Here's how it works: Granular Buyer Data: By cataloging buyer models at a granular level, sell-side advisors can understand buyer needs better. This includes everything from organizational structure to client experience and technology stack. Tailored Matching: Instead of casting a wide net, the Cultural Conviction process focuses on matching sellers with a select few buyers who align well on crucial points. By reducing the number of buyers but increasing their quality, sellers can spend meaningful time with each potential buyer, fostering a better cultural fit. Encouraging Interaction: From day one, buyers and sellers are encouraged, and even required, to spend quality time together. This interaction is essential for assessing cultural fit and ensuring that both parties are making informed, rational decisions. Outline: 00:32 Exploring Alaris' Unique Approach 02:41 The Legacy Pathway: Financial Auctions 06:07 Psychology and Pitfalls of Financial Auctions 10:55 Cultural Fit: The Key to Successful Transactions 20:59 Alaris' Cultural Conviction Process

Welcome to Part 4, the final segment of our special 4-episode series designed to help sellers differentiate between buyer’s models. This episode, “Expansion of Capabilities,” features special guest Kevin Corbett, Managing Director of Corporate Development at Mariner Wealth Advisors. Together, we discuss the growth strategies that buyers are adopting, including people and expertise, additional services, and training programs for next-gen advisors. Join hosts Allen Darby and Jacqueline Martínez from Alaris Acquisitions as they dive into the nuances of differentiating between buyers and their models in the RIA M&A landscape.

Welcome to Part 2 of our special 4-episode series designed to help sellers differentiate between buyer’s models. This episode, “Buyer Lifecycle Differences,” we dive into insightful discussions with two distinguished guests, CJ Rendic of Parallel Advisors & Scott Holsopple of Hightower Advisors. Together, we discuss the three primary areas of differences: access to resources, seat at the table, and equity appreciation, and weigh the pros and cons of each for sellers embarking on their journey. Join hosts Allen Darby and Jacqueline Martínez from Alaris Acquisitions as they dive into the nuances of differentiating between buyers and their models in the RIA M&A landscape. Join the conversation - Follow our hosts on LinkedIn: ⁠⁠Allen Darby⁠⁠ ⁠⁠Jacqueline Martínez⁠⁠ ⁠⁠Alaris Acquisitions⁠⁠ Subscribe to our podcast here -> ⁠⁠bit.ly/3MxEilB⁠⁠ and get every new episode delivered straight to your inbox.

Michael Belluomini, Vice President of Mergers and Acquisitions at Carson Group, breaks down the post-LOI cadence during a transaction. Jacqueline and Allen also share intriguing behind-the-scenes stories, including a seller's last-minute agreement change just hours before signing the purchase agreement. Tune in for a candid look at the unexpected twists in M&A negotiations. Join the conversation - Follow our hosts on LinkedIn: ⁠Allen Darby⁠ ⁠Jacqueline Martínez⁠ ⁠Alaris Acquisitions⁠ Subscribe to our podcast here -> ⁠bit.ly/3MxEilB⁠ and get every new episode delivered straight to your inbox.

In the dynamic landscape of wealth management, achieving success requires more than just financial expertise. Join us in this insightful episode of The Buyer's Boardroom as we dive into the intricate world of Practice Management. Our esteemed guest, Stephanie Bogan, Founder of Limitless Advisor, brings her unparalleled insights to the table. With hosts Allen Darby and Jacqueline Martinez, we uncover the crucial question: "How do you know when Practice Management becomes a critical issue for your firm?". Stephanie lends her expertise to help you identify the telltale signs that necessitate a deeper focus on Practice Management. Discover the early indicators that could transform the trajectory of your wealth management firm. Join the conversation - Follow our hosts on LinkedIn: Allen Darby Jacqueline Martínez Alaris Acquisitions Subscribe to our podcast here -> bit.ly/3MxEilB and get every new episode delivered straight to your inbox.