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M&A Guidance When Selling Your Practice

SkyView Partners provides turnkey M&A and bank financing for independent and registered investment advisors, yet only 27% of their applicants had retained the services of an M&A consultant to assist in the sale of their practice, even with a median sale price of $2.75 million. Instead, they go it alone in a “for sale by owner” (FSBO) approach to what has become a very competitive and sophisticated market.

For most individuals, the sale of their home represents one of the most significant financial transactions they will ever make. The same is true of financial advisors when considering the value of the practice they are selling. One key difference, aside from the sale price size, is that financial advisors only sell their practice once – at or near the end of their careers. On the other hand, homeowners usually have the opportunity to sell more than once in their lifetime, learning from each experience. And yet, almost 90% of real estate transactions involve an agent.

The introduction of multiple financing options, increased sophistication of serial acquirers, and increased enterprise valuations signals the need for expertise when considering the sale of your most valuable professional asset. Coupling that with significant increases in sellers’ enterprise values, competition for each listing is growing. Just as a realtor and the MLS process bring the parties together and help them commit to closing the deal - in writing, on time and at or near fair market value - independent financial advisors would be wise to follow suit.

In the M&A field for independent financial professionals, a consultant can provide numerous and important advantages to a first-time seller:

  • Valuation assistance
  • Exit options
  • Financing
  • Experience
  • Potential buyer selection
  • Profitability


M&A professionals in the financial services industry can often calculate an appropriate market price based on multiple factors including “comps” or recently closed transactions, contextual information that a seller would not have access to. In addition, a quality market-based valuation will consider the underlying deal terms and tax allocations that impact the valuation result. Sellers only have one chance to do this right; having all of the necessary financial information is critical to achieve a positive outcome.


Many tenured advisors are unaware that there are alternate retirement options to simply selling the business they built over decades and walking away. An M&A consultant can help sellers identify what is most important to them and then find the buyer and financing to accommodate their needs, including remaining part-time, or selling a portion of their practice but maintaining their current role.


Twenty years ago, 75% or more of every purchase price was seller financed on a contingent basis – similar to a contract for deed. Post transaction, the seller had more risk in most cases than the buyer. Today, the transaction risk is absorbed by buyers utilizing other financing sources which has significantly increased transaction complexity and valuations. An M&A consultant can help buyers decide which financing options – private equity, seller note, bank financing, or a combination - are right for their situation.


Serial buyers have a distinct advantage in the M&A process as they get to acquire, or attempt to acquire, many times which results in an imbalance of expertise between the transaction parties. Buyers may range from novices to national aggregators, but at a median selling price of $2.75 million, these are rarely first-timers. Retaining an M&A consultant helps to level the playing field for sellers and ultimately arrive at a fair and mutually beneficial outcome.

Buyer Searches

M&A consultants have multiple resources for searching for the most suitable buyers outside of the seller’s current circle of acquaintances. Conducting a broader search of viable buyer candidates with an M&A consultant can provide sellers with a greater array of options, often resulting in discernibly higher multiples when a suitable and creditworthy prospect is identified.

M&A consultants create deal structures that help protect both the buyer and seller. Buyers and sellers who do not engage an M&A consultant routinely have corporate attorneys who are solely focused on the interests of their client, often leading to failed transactions. A seasoned M&A consultant who is familiar with this highly regulated profession can often help keep both parties’ interests aligned and construct a transaction that is sound for everyone and benefits the clients in transition.


M&A consultants charge a fee for comprehensive sell-side support that ranges between 5% and 6% of the purchase price, similar to that of a residential real estate agent. Part of the fee can be allocated to the buyer and can be financed by some lenders. Typically the fee is more than offset by benefits the M&A consultant provides, resulting in higher net proceeds from the sale

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