JPTD consults on a $48m all-in-offer* for a $4m Hybrid RIA team
Practice Background
Our client is a hybrid practice with 3 second-generation advisors. The bulk of their business revenue derives from wealth management. The firm was established in 1994 and has had a growth rate of approximately 15% a year over the past 5 years. The client is a referral-based practice with the primary source of new business being client engagement events.
Client Objective
The client's goals are:
- Partner with a firm that can provide support for continued growth
- Have the opportunity for the Second Generation to excel and reap the benefits of continued growth
- Join an organization that recognizes and agrees with the high ethical standards that have been established within the practice
- Provide support for a reasonable transition for clients
Key Data
Top line revenue - $4.1m
EBITA - $1.75m
AUM - $450m
# of clients - 400
5-year CAGR - 15%
Years in biz - 28
All-In Offer* Highlights
10-Year Total Value Forecast and Highlights
Up Front Consideration
$17.5m
Ongoing Compensation **
Comp On Existing Business $12.8m
Comp On Future Business $10.2m
Long Term Considerations
5 Year Growth Accelerator $755k
LTGI $5.7m
Owner's Equity Participation ***
$2m+
Total Value Created
$48.8m
*An All In Offer includes any money paid upfront, signing bonus, salary and potential earn-outs based on growth. It does not include retirement or overrides on production. Assumes you hit all required transition, retention and growth expectations.
** Compensation amount reflects total compensation paid to advisors and is not necessarily all paid to seller or head of office.
*** Based on firm's stated goal $10bn in 10 year and estimated valuation at that point in time.