Big RIA buyers flock to ECHELON M&A event and agree on one takeway: It's a 'seller's market' -- but maybe not forever
Cerity, Mercer and Summit Trail chiefs say tripling of practice buyers means multiples are staying flush, but they urge some caution to on-the-fence RIA sellers.
3 min readDan Seivert led off his firm's conference on Monarch Beach with a 10-minute talk about how surfing is analogous to RIA M&A.
But he side-slipped a too-obvious metaphor: the giant, never-ending wave that keeps sweeping small RIAs into big ones and making buyers, sellers and brokers rich in the bargain.
The ECHELON Partners CEO, in his 13th year hosting a premier industry M&A event, fielded a panel that included chiefs of two power roll-ups -- Kurt Miscinski of Cerity Partners and Dave Barton of Mercer Advisors.
They were joined by Jack Petersen, managing partner of an acquisitive $18-billion RIA, Summit Trail Advisors.
None appeared to be a surfer – but all professed to be riding the M&A wave, joyfully at the Deals and Dealmakers Summit in Laguna Niguel, Calif.
Yet the elite buyers – with a touch of “…said-the-spider-to-the-fly” – could only nod in assent when Barton answered the question on the minds of RIAs in the audience.
Dan Seivert drops M&A data bombshell at his Dealmakers Summit to gasps
On the next panel, Mark Tibergien echoed the sentiment.
Prices rising
Did the RIA buying craze pass by firms that were unprepared to sell into the seeming frenzy?
No, Barton says. “It's absolutely a seller's market... Prices [for RIAs] continue to increase.”
The number of serious RIA buyers tripled in the past seven years, Barton said in his panel remarks.
Story Timeline
A “seller's market” is an M&A term of art. It describes a market where RIA inventory is constrained, and buyer interest only keeps expanding, says Seivert. “There are only 300 [of 16,000+] that get transacted in a year.”
In the mix
RIA buyers charge to Newport Beach moaning a familiar refrain: Not enough sellers! Yet, not one believes that RIA M&A is a bubble... much
Seivert adds that 30% of all RIAs consider themselves “buyers” of their fellow RIA firms. He also says that Barton is right about prices – they remain at or near all-time highs.
The buying – and growth in general – is so pronounced currently that Cerity is reaching what Miscinski proclaims is “escape velocity.”
He expressed satisfaction for “witnessing it firsthand,” and that he's “grateful to be in it,” a sentiment shared widely at the event.
One Caveat
Still, Miscinski and others cautioned that just because it's a seller's market – and has been for most of the past recent years – doesn't mean that it can't change – and fast.
“It's still a sweet spot but I wouldn't wait forever,” Barton cautions. “It's not going to last forever.”
Miscinski adds that it can change in as quickly as a quarter.
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