At a glance
- Jim Abbott, a partner and co-head of the corporate M&A practice at Seward & Kissel, said most buyers require rolled equity, with acceptable stakes ranging from 20% to 35% or more.
- All-cash deals are rare unless the seller is retiring, he said.
- Sellers who accept stock are underwriting an illiquid position for several years, which shifts due diligence from the RIA's own multiple to the buyer's growth plan and balance sheet.
Equity made up an average of 29% of consideration in RIA change-of-control transactions in 2025, and buyers expect 33% in 2026, according to Advisor Growth Strategies data cited by Wealth Solutions Report.
Jim Abbott, a partner and co-head of the corporate M&A practice at Seward & Kissel, said most buyers require rolled equity, with acceptable stakes ranging from 20% to 35% or more. All-cash deals are rare unless the seller is retiring, he said. Buyers also value their own businesses at higher EBITDA multiples than the RIAs they acquire, Abbott said.
Sellers who accept stock are underwriting an illiquid position for several years, which shifts due diligence from the RIA's own multiple to the buyer's growth plan and balance sheet. Josh Harris, president of M&A at Coldstream, said a seller should understand the buyer's long-term plan. Bryan Staff, co-founder and managing partner at Merchant, said rollover equity "should be evaluated as a new investment."
Reported by the Succession & selling a firm desk from Wealth Solutions Report. Published . Corrections