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Are We Being Authentic? Reflections on Selling Your Firm in a Seller’s Market
I often meet with the president and the CEO of Diversified to discuss business planning and advisor growth. It is no secret that while we are doing an amazing job in organic growth, we still have one eye on acquisitions as well. What I find interesting is the discussions we have on the M&A market and the expectations and conversations around it being a “seller’s market.”
Frankly, we’ve all been around long enough to know that every M&A conversation starts the same way, especially when dealing with an institutional or serial buyer.
The buyer talks about partnership, legacy, and autonomy.
My guess is the seller nods along, maybe even starts to believe it.
Everyone smiles. Then the deal gets done.
But I can’t help but ask: is everyone being authentic in these conversations?
And more importantly, are the selling advisors being honest with themselves?
I’ve Seen the Promises. I’ve Seen What Happens After (too often).
In my many years of working with advisors — especially those exploring a sale or merger — I’ve repeatedly watched the same story unfold. A larger firm, often backed by private equity, shows up with a compelling pitch:
- “You’ll maintain full autonomy.”
- “We want your team to stay exactly as it is.”
- “We’re here to support what you’ve built.”
In my experience, these aren’t lies. But they’re also not the whole truth.
Because if you really think about it, what is the purpose of an institutional or traditional PE-backed firm? It’s to acquire, grow, optimize, and eventually sell. The ownership structure is built for acceleration and scale. That’s the game they’re playing. And that game has rules — rules that often don’t include letting acquired advisors steer their ships indefinitely.
So, if, for example, your team is important to you, before you get too far down the road with a potential partner, ask a simple but powerful question: Who do they report to? If it’s not their clients, it may be worth pausing.
This is the M&A Game. Make Sure You Know the Rules.
I don’t want this to sound anti-M&A. Done right, it can be a win-win. But I am pro-transparency. And I worry that many advisors are going into these conversations unprepared — not just for the legal and financial complexities, but for the cultural shift that follows. I certainly don’t blame advisors going through this process, they have probably never sold a firm before, but that is why it is important to really think about what you are doing.
You might think you’re joining a “partnership,” but if you’re not aligned on the vision — on the why — you’re not joining a team. You’re joining a strategy.
And if you’re promised that “nothing will change,” ask yourself: Then why are they buying you in the first place, especially at this multiple?
Are You Being Honest with Yourself?
Now let me flip this around — because it’s not just about the buyers.
Sellers have to take a hard look in the mirror, too.
If your only goal is to maximize your payout, that’s fine—just say it out loud. But let’s not pretend that’s automatically in your clients’ best interest. You’ve spent years (decades, maybe) positioning yourself as a fiduciary. That shouldn’t change just because there’s a check on the table.
Before you move forward, ask yourself:
- What matters more to me than price?
- What am I not willing to compromise on?
- What promises do I owe to my staff, my clients, my legacy?
This isn’t just a financial transaction. It’s a moment of truth.
The Seller’s Market is Real—But So Is the Risk
Yes, valuations are strong. Yes, demand is high. But those dynamics can create a false sense of urgency, like you have to act now or miss out forever.
Don’t buy it.
This is your life’s work. Take your time. Ask harder questions. Expect better answers. And don’t confuse a great pitch with a great fit.
What You Should Hear in an Authentic Conversation
Here’s what I believe an authentic M&A conversation sounds like:
- Honest talk about what will change, and what won’t. Getting as specific as possible
- Clear answers about decision rights – post-close.
- A shared vision for client service, culture, and growth.
- An acknowledgment of the tension between autonomy and scale.
- Your exit strategy and alignment with theirs.
If you can’t have that kind of dialogue before the deal, what makes you think it’ll show up after?
Advice: Play the Long Game
You don’t need to take the first (or highest) offer.
You don’t need to race the clock.
And you definitely don’t need to give up your values to get liquidity.
You’ve spent a career doing what’s best for your clients.
Now’s the time to do the same for yourself.
So ask yourself, honestly:
Are we being authentic in this conversation?
And is the other side doing the same?
If the answer is yes, you’re on the right path.
If not, keep looking.