What is your advisory practice actually worth, and what can you do today to increase that value?
In this episode of RIA Collective, Charlie Van Derven sits down with Andrew Mirolli, Co-Founder of buyAUM.com, to discuss how financial advisors can build more valuable, transferable businesses and prepare for an eventual exit.
With roughly 106,000 advisors representing 41% of industry assets expected to retire over the next decade, succession planning is becoming a major issue across wealth management. Andrew explains what buyers are looking for and why two advisory practices with similar revenue can command very different valuations.
Charlie and Andrew discuss:
• What financial advisory practices are selling for today
• Revenue multiples vs. EBITDA multiples
• Why recurring revenue alone doesn't guarantee a strong valuation
• The importance of building durable, transferable client relationships
• How client concentration can create risk for potential buyers
• Why advisors need relationships with the next generation
• How consistent organic growth can increase enterprise value
• Why reducing founder dependency matters
• Building systems and processes that survive without the founder
• The importance of succession planning before you're ready to retire
• Why culture and client fit should matter as much as the purchase price
• How advisors can prepare mentally for life after selling their practice
Andrew also shares five areas advisors should focus on when building enterprise value:
1. Think like an owner, not just an advisor.
2. Build durable recurring revenue.
3. Reduce founder dependency.
4. Build client relationships that extend beyond one generation.
5. Protect client fit and culture when choosing a successor.
One of the biggest questions Andrew suggests every advisor ask is simple:
If you were locked in a room for 60 days, what would break in your business?
The answer can reveal just how dependent the business is on you and how transferable it may actually be.
Whether you're preparing to sell in the next few years or plan to remain in the business for decades, building enterprise value should start long before an LOI lands on your desk.
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Connect with Andrew Mirolli
https://buyaum.com/
https://www.linkedin.com/in/andrewmirolli/
Connect with Charlie Van Derven
www.social-advisors.com
www.linkedin.com/in/charlievanderven/
Chapters
00:00 Building Enterprise Value as an Independent Advisor
01:00 The Coming Advisor Retirement Wave
03:00 Succession Planning and the Next Generation
05:00 What Makes Advisory Revenue Transferable?
06:30 What Is an RIA Worth?
08:00 Understanding Advisory Practice Multiples
11:00 #1: Think Like an Owner
13:00 #2: Build Durable Recurring Revenue
15:00 #3: Reduce Founder Dependency
17:30 #4: Build Relationships With the Next Generation
19:00 #5: Protect Client Fit and Culture
23:00 Preparing for Life After Selling Your Business
26:00 Closing Thoughts
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