Why Advisor M&A Deal Talks Fail

When Independent Financial Advisor M&A Deal Talks Fail:  The Four Most Frequent Reasons For Prospective Sellers

The independent financial advisor M&A marketplace is experiencing a frenetic level of activity.  Much of the wealth management space’s attention has been on larger deals involving larger firms such as Wealth Enhancement Group, Canada-based CI Financial and Stratos, to name but a few.

The deals these firms do are more than worthy of notice, but it’s also important to point out that the wealth management idustry is an ecosystem where much of the action is happening sight unseen, among smaller inhabitants.  And without question, many of the most desired acquisitions are smaller, more compact businesses that (in theory) can be easily bolted onto another existing business.

But despite the surge of M&A among independent financial advisor practices – especially businesses with client assets at or below $250 million – many deal discussions move to a fairly advanced stage, only to be abandoned by the would-be seller. 

Whether you’re a prospective acquirer or seller, here are the top four reasons such deals fall apart on the seller’s side (based on research from BridgeMark Strategies, the national consultancy focused on financial advisor transitions, transactions and recruiting, shared exclusively with Larry Roth of Wealth Solutions Report).


Jeff Nash, CEO of BridgeMark Strategies:  “We’re seeing a continued surge of M&A transactions among independent financial advisor businesses reflected in both intensifying transaction volume and rising prices.  You might think that prices would go down as volume increases, but that hasn’t been the case so far.  Instead, the trajectory of deal volume and deal prices are in lockstep together, with demand and valuations for higher quality businesses continuing to accelerate.  But even in this market, a large number of transaction discussions fail to cross the finish line.”

“Prospective sellers can boost their chances of getting a successful deal done by aligning their expectations with the reality of their business performance, hire attorneys who truly know both M& and the wealth management industry and do some initial spadework to ensure their business can be integrated on a reasonably seamless basis by a broad range of potential buyers.”

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