Key Management Group Releases New White Paper Offering Insights into the Future of Mergers and Acquisitions for Financial Advisory Practices

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The M&A market for financial advisory practices is entering into a new era. In their new white paper, Key Management Group provides insight into the future of succession planning and practice valuations for financial advisory practices.

The Mergers and Acquisitions market is entering a 15-year period that is unprecedented in our lifetime. The “Age Wave,” a term coined by Ken Dychtwald, Ph.D and his book of the same title, refers to the aging of the Baby Boomer generation and how it is the most important trend of our time. It is estimated that as many as 40% of financial advisory practices will change hands over the next 10 years.

The majority of business owners are Baby Boomers and, by extension, the majority of owners of financial advisory practices. In fact, the average age of all financial advisors is approximately 56 years old and the average age of a financial advisor’s succession is currently 57 years old. The front of the “Age Wave” is here, with the peak and an all-time record for business transfers expected to happen six years from now in the year 2020; with the “Age Wave” trend ending in 2030.

For the majority of financial advisors, the equity in their practice is their largest personal asset. Moreover, financial advisors recently selling their practice have enjoyed a steady gain in practice value over the past 5 years.

Multiple factors can influence valuation, from the stock market to interest rates; with simple supply and demand being the primary, external, market value driver. To date, buyers have kept pace with the recent increase in supply but it is only a matter of time (maybe two years) before supply and other factors slow or reverse the current increase in valuation.

We are entering a time that is unprecedented and certainly requires a higher level of strategic planning and due diligence for success. The “good old days” of a handshake deal based on 2x recurring revenue and 1x transactional revenue are behind us if we are being good stewards of our respective practices.

We are in exciting times with unprecedented opportunity accompanied by increased complexity. Navigating the waters of the “Age Wave” will require both best efforts and the support of experts. If an advisor wants to achieve their succession goals, they must plan, and plan early.

To learn more, download a copy of the attached white paper or visit their website at

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Anthony Whitbeck
Key Management Group
+1 888-848-3349 Ext: 249
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since: 01/2010
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