Headline Multiples: The fine print behind the big number

It seems like not a day goes by without an announcement of a merger or acquisition of a financial advisory firm by a serial buyer or PE firm.  The numbers, typically rumored, at first are typically huge and leave us all to wonder how the seller was able to achieve such a fantastic deal.

But here’s the thing: those big, bold multiples? They’re often more mirage than milestone.

It happens often.  I had a conversation with an advisor recently considering a merger into a large, well-known roll-up. On paper, the deal looked great. Solid brand, good cultural alignment, and a projected sale number that made the founder lean in. But then came the fine print: the “great number” was total (after earnout) and contingent on hitting something like a 20% net new growth target compounded each year for 4 years during transition.

Now, that doesn’t sound unreasonable… unless you’ve never grown at that rate before. Which, in this case, they hadn’t in many, many years.

This isn’t just about one deal. There is a pattern: advisors walking away from sales feeling disappointed, not just with the number, but with the experience. Why? Because the headline multiple clouded everything else.

If You’re Thinking About Selling, Here’s What You Should Really Be Asking:

Whether you’re seasoned owner thinking about your legacy, or a COO steering a growing firm into the future, the truth is: deals that start with inflated expectations often end with regret.

Here are a few questions worth putting on the table before you sign anything:

1. Who are you actually talking to?
   Are you speaking with the real decision-makers—or someone whose paycheck depends on getting your deal across the line?
2. Can you look this person in the eye after the close?
   Culture, values, and accountability matter. Post-sale relationships are personal. Make sure the fit feels right—because you’ll be tied together for years. Starting off on the wrong foot usually never works in the long run.
3. What’s really in that headline number?
   How much is guaranteed, and how much is hanging on a performance-based earn-out? Do those targets reflect your actual growth history?
4. What’s their track record on the back end?
   Ask for proof. Real examples. Names. Show me a seller who hit the earn-out and let me talk to them. Because otherwise, we’re just trading stories.
5. Have you stress-tested the deal assumptions?
   What happens if you miss the growth targets? If a key staff member leaves? If the market takes a turn? A deal isn’t just a best-case scenario either about your worst-case protection.
6. Would your clients thank you for this decision?
   If you had to explain the sale to your top 20 clients, would they see it as a value-add or a value extraction? To me, the answer to that question matters more than the multiple.

Real Deals, Real Conversations

This ties directly back to what I shared in my last post: the power of authentic conversations. A deal isn’t just about valuation, it’s about vision, values, and alignment.

If a buyer can’t be transparent about what it takes to earn the full number, and can’t show that others have done it, then maybe that number isn’t the real story.

Final Thought

Selling your firm isn’t just a financial event, it’s a legacy decision. And nothing clouds that faster than a shiny multiple with blurry terms.

Don’t let the headline become a blindfold. Seek the real story, ask the tough questions, and make sure the deal feels as good at the finish line as it did in the pitch.

Because you only get to sell it once. And you deserve to get it right.