6 Essentials to Pick the Right Buyer for Your Practice

Choosing a buyer for your advisory practice should be a piece of cake. The number of buyers vastly outnumbers that of sellers, so you should simply sell to the highest bidder, right?

In most cases, that would be a costly and irreversible blunder, because much of the value of the deal comes in back-end payments. Thus, advisors need to do the due diligence to be sure that a potential buyer can live up to his or her promises. Once an advisor sells a firm or practice, there are no “do-overs.” You have to get it right the first time, because your retirement nest egg is riding on it.

Selling an independent advisory practices typically includes earn-outs, which are based on back-end performance ranging from 50% to 70% of the total deal or sale’s price. At the wirehouse firms, the entire deal is back-end based. Earn-outs are paid via a mix of cash, equity and interest-bearing notes. Down payments are often 30% to 50% of an agreed upon value.

via 6 Essentials to Pick the Right Buyer for Your Practice.

Beirne Wealth Consulting BWC, a fast-growing, $2 billion fee-only firm, has picked up a team of financial advisors from Morgan Stanley.BWC, an independent partner firm of Focus Financial Partners, has added Allentown, Pa.-based advisors Christopher Englebert and Daniel Reitz who previously managed approximately $250 million in client assets at Morgan Stanley. The central Pennsylvania office will be the third opened by the Milford, Conn.-based BWC in two years.

via Beirne Wealth Consulting Adds Morgan Stanley Advisors | On Wall Street.

Fresh off the announcement Thursday of his intention to purchase Cetera Financial Group Inc., Nicholas Schorsch compared his new broker-dealer network, when the deals are completed, to two of the biggest names in the retail-securities industry: the old Merrill Lynch and Raymond James Financial Inc.

via Schorsch: RCS Capital is the next Merrill or Raymond James.

An advisory practice with more than half a billion in assets under management has dumped its wirehouse affiliation and hooked up with Raymond James Financial Services.The Raymond James announced Monday that it had recruited financial advisors Benjamin Weiner, Michal Hlavek, Duke Marsh and Daniel Iosue from Morgan Stanley to its independent channel. The team now operates an independent firm just outside Orlando, Fla., called Winter Park Wealth Group. While affiliated with Morgan Stanley, the group managed in excess of $550 million in client assets and generated $2.3 million in annual fees and commissions.

via Winter Park Wealth Group Joins Raymond James Financial Services | On Wall Street.

UBS recently hired Courtney Liddy as a senior vice president and wealth management advisor in the firm’s San Diego office

via Who’s News: Recent Advisor Moves | On Wall Street.

Three top brokerages have raised the stakes for managing the finances of the wealthiest clients, tweaking pay packages for advisers to spur them to lock their sights on the most prestigious accounts.In compensation plans announced internally last week, Morgan Stanley Wealth Management, Merrill Lynch Wealth Management and UBS Wealth Management Americas took a variety of steps to encourage their 40,000 advisers to emulate the industry’s top revenue producers, who cultivate a select set of wealthy clients.

via 3 wirehouses raise stakes to court rich.

Payout grid. The payout grid, which is based on a percent of trailing-12 month production, remains largely the same except for three production bands between $300,000 and $600,000, which are moving up slightly. For example, a 39% payout that would have applied to advisors making between $400,000 to $599,999 will now apply to advisors in the $425,000 and $625,000. Those changes will take effect July, 1, Chandler said.The so-called “penalty box,” which assigns a mandatory 20% payout to advisors with eight years or more of experience and less than $325,000 in revenue will apply to advisors with under $350,000 in revenue in 2015, Chandler said.

via UBS 2014 Compensation Plan Rewards Planning, Raises Minimums | On Wall Street.