InvestmentNews Highlights LPL Insights on RIA Valuations

In an interview with InvestmentNews, LPL Financial’s Jeremy Holly discusses the current trends for RIA valuations and how financial advisors are setting up their wealth management practices for success.

“There’s a large number of buyers, good access to capital, so we’re seeing a lot of interest in mergers and acquisitions and a lot of buyers that are holding up valuations and paying more up front in terms of deal structures.” That’s just one insight Jeremy Holly, LPL’s head of advisor financial solutions, recently shared on InvestmentNews’ 3 Questions.¹

Holly went on to share other trends in the M&A space, including the partial monetization of practices where financial advisors are selling parts of their books. “They’re taking chips off the table,” Holly says. “They’re taking minority stakes or even doing partial book sales.” Holly believes advisor are trying to free up capacity in their business or seeking capital to reinvest in their practices.

The disruption of COVID-19 also taught a lot of financial advisors how to thrive virtually. “There was a lot of innovation,” Holly says. “We saw virtual due diligence actually be successful.” Holly expects that now financial advisors seeking to expand will look beyond their local markets. 2020 showed them how to adapt and made them more comfortable buying practices outside of their immediate communities.

The other trend that Holly believes will continue in 2021 is that sophisticated, experienced buyers will pursue and win books of business. “I expect more consolidation, I expect more mergers. Valuations are at an all-time high. Businesses are at an all-time high. Markets are at an all-time high,” Holly says. “I expect the deal volume to continue and even pick up. Another record year is on the way.

We’re ready to help

LPL’s Advisor Financial Solutions is prepared to help advisors take advantage of this momentum and enjoy a smooth transition. Holly’s team provides support with:

• Identifying the ideal seller
• Structuring the right deal
• Providing financing

Contact your recruiter for a confidential conversation about your options.

¹ https://www.investmentnews.com/video/201673