The Buyer's Boardroom

Episode 28: How buyers evaluate a seller's P&L with Special Guest Jacob Vick from Beacon Pointe AdvisorsHosts: Allen Darby & Jacqueline MartinezGuest: Jacob Vick, Senior Director, M&A at Beacon Pointe AdvisorsYour P&L is one of the first documents buyers use to evaluate your business, but it rarely tells the whole story. In this episode, Allen and Jacqueline sit down with Jacob Vick to discuss how sophisticated buyers analyze financial statements during due diligence, what adjustments are considered normal, and which financial metrics have the biggest impact on value.Most buyers begin with three years of profit and loss statements, balance sheets, and year-to-date financials to develop an initial view of the business. While these documents provide a starting point, deeper diligence typically includes direct access to accounting systems to validate the accuracy of the numbers before closing.Many advisory firm owners run legitimate personal or discretionary expenses through the business for tax planning purposes. Buyers expect this. During diligence, these expenses are identified and adjusted to determine the firm's true operating profitability while ensuring the business still has the resources necessary to sustain growth after a transaction.After a Letter of Intent is signed, buyers typically perform a Quality of Earnings analysis to validate revenue, expenses, and cash flow. This process goes well beyond reviewing financial statements by reconciling billing records, custodial data, and bank deposits to confirm that reported earnings accurately reflect the economics of the business.Recurring advisory revenue continues to command the highest value because it provides predictable cash flow. Firms with significant commission or transactional revenue often receive additional scrutiny during diligence. Buyers are also evaluating operating expense levels, owner compensation, and whether the business has invested appropriately in people, technology, and infrastructure to support future growth.Healthy EBITDA margins are important, but exceptionally high profitability is not always viewed positively. Buyers may see unusually high margins as evidence that the firm has underinvested in staffing, technology, marketing, or leadership. The strongest businesses balance profitability with continued investment in long-term growth.One of the biggest risks for sellers is signing an exclusivity agreement before buyers have fully validated the financials. If an LOI is based only on a high-level review of the P&L, sellers may lose negotiating leverage if the buyer later attempts to reduce value during detailed diligence. Understanding how buyers underwrite financial performance before signing can help avoid costly surprises.Financial performance is only part of the equation. Buyers also evaluate leadership, transparency, succession planning, and the firm's long-term growth strategy. Owners who clearly communicate why they are pursuing a partnership and who prepare their teams appropriately often experience a smoother transaction and stronger post-close outcomes.A clean P&L is important, but buyers are purchasing much more than financial statements. They are assessing the quality and sustainability of earnings, the firm's ability to continue growing, and whether the business has been built to succeed beyond the founder. Understanding how buyers evaluate your financials before entering the market can significantly improve both deal certainty and long-term outcomes.The First Look at Your FinancialsRecasting Your FinancialsThe Quality of Earnings ProcessWhat Buyers Focus on MostUnderstanding EBITDADon't Get Trapped by the LOIBeyond the NumbersBottom Line

In this episode of The Buyer's Boardroom, hosts Jacqueline Martinez and Allen Darby delve into the nuances of internal versus external succession planning for financial advisory firms. They explore key considerations, including valuation differences, the role of equity participation, and distinguishing great advisors from great business owners. David Wahlen, Director of Strategic Growth at CapTrust, joins to share insights on post-acquisition equity distribution and the importance of fostering partnerships by equitizing key team members. The episode concludes with practical advice on timing an acquisition, factoring in valuation growth, risk, and quality of life. Join the Conversation: We invite you to share your thoughts on this approach. Email your reactions to [email protected]

In this episode of the Buyer’s Boardroom, Allen Darby and Jacqueline Martinez explore one of the biggest concerns for sellers: the fear of losing independence. Here, they break down the myths and realities surrounding autonomy when transitioning into a new partnership. Dean Barber of Modern Wealth Management joins as a special guest, offering insights from his personal experience after partnering with a larger firm. Together, they examine the six key areas of decision-making that sellers are most concerned about and offer practical advice on how to address these fears. Join the Conversation: We invite you to share your thoughts on this approach. Email your reactions to [email protected].

Welcome to Season 3 of The Buyer’s Boardroom! In this special episode, we flip the script to spotlight the essential role and value of M&A advisors. Join hosts Allen Darby and Jacqueline Martínez from Alaris Acquisitions to discover how Alaris is transforming the industry with innovative processes that benefit both buyers and sellers. Learn about the crucial phases of the M&A journey, the importance of cultural fit, and the strategic advantages of having a dedicated advisor. 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.

Welcome to Part 3 of our special 4-episode series designed to help sellers differentiate between buyer’s models. This episode, “Buyer Autonomy Differences,” we dive into insightful discussions with two distinguished guests, Arthur Ambarik of Perigon Wealth Management & Brent Brodeski of Savant Wealth Management. Together, we dive into autonomy differences and the three mandatory points of alignment: structural, operational and client experience. 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.

Welcome to a special 4-episode series on how to differentiate between buyer models. The first part of this series is "How to differentiate between buyers' deal structures - minority interest vs full acquisition?", featuring insightful discussions with 2 distinguished guests on each episode. 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. Subscribe to our podcast at bit.ly/3MxEilB to receive each new episode directly to your inbox. Stay informed about the RIA M&A landscape by subscribing to Alaris' mailing list for monthly insights. In this episode, gain valuable perspectives from Joe Duran and Glenn Spencer. Don't miss out – tune in now! #RIAMandA #Podcast #AlarisAcquisitions 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.

Our guest, Shawn Meade, CPA, shares the experience he and his partner went through when they sold their practice. From the financial considerations, managing their staff, communicating with clients, and navigating the emotional ups and downs, Shawn offers guidance that can empower potential sellers considering a similar path. 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.

How sellers can enhance organic growth after forming partnerships: Insights from Pat McClain, CEO of AllWorth. Allen Darby, Jacqueline Martinez, and Pat McClain shed light on the crucial elements that buyers seek when evaluating potential sellers. They uncover the intricacies and nuances that play a pivotal role in shaping buyer decisions, and why these factors hold immense significance in the M&A landscape. Discover during the episode, actionable strategies and practical insights shared by Pat McClain himself, as he elucidates the steps sellers can take to fuel organic growth post-partnership. Join the conversation - Follow our hosts on LinkedIn: Allen Darby Jacqueline Martínez Alaris Acquisitions Get every new episode delivered to your inbox: Subscribe here.