Recruiting Services of Arizona is a recruiting and placement firm founded in 2006. Our group of experts works exclusively in the financial services industry with a focus on independent broker dealers, RIAs, and Hybrid types of firms. With over 20 years of experience in the financial services industry, our background helps us understand the needs and wants of your firm and its potential representatives given the current climate of the industry summarized below
- The Fiduciary rule has dramatically changing the landscape forever for all advisors, commission-based business will be forever scrutinized, full financial planning is vogue, and transparency in fees is a must.
- Experienced Advisors are in Demand – Total number of advisors has dropped to roughly 301,000, down 11% from its peak in 2005. **
- Aging Professionals – Today, the average age of a financial advisor is 51 with 38% of advisors expecting to retire in the next 10 years and just 10% of financial advisors today who are under age 35. *
- Total Advisor Population –THE BREAKAWAY ADVISOR – 69% of breakaway advisers, say that a “desire for greater independence” is a “major factor” in their decision to move firms. At the same time, 56% said “concerns about quality of broker-dealer’s culture” was a “major factor” in their decision. *
What We Do For Firms
The administrative tasks of the recruiting process are carried out by us. We will source and screen qualified candidates, as well as coordinate job offerings and maintain applicant tracking logs, etc. We work closely with our clients to ensure only the most qualified candidates are acquired. As highly qualified and professional recruiters, we use only the best tools and resources to source prospective representatives for the Financial Service Industries.
Some of the tools that we use to find financial advisors that might want to move their practice include:
- Digital Marketing
- Conferences
- Behavioral Retargeting
- Phone Calls
- Emails
- Various Social Media tools
What We Do For Advisors
R.S.A. & Advisor Seminars, LLC is a firm that works with Financial Advisors that may want to look for another firm. We have acquired an in-depth knowledge and understanding of the needs and wants advisors are facing and dealing with in today’s market. We are constantly engaging Registered Reps, Fee Based Advisors, Wealth Managers, and Insurance Professionals to gauge their interest in our services, which include:
- Business Succession Planning
- Assets Under Management (AUM) Book Sales
- Recruiting for Independent Broker Dealers and RIAs.
We provide customizable recruitment services for financial advisors that focus on;:
- Broker Dealers, learn more about them
- Why join
- How to become a part of the team
- FAQ’s
- Account opening and management process?
- How compliance and supervisory processes work?
- Technology offering
- Advisor freedom and control?
- About the broker-dealer’s primary revenue sources
- Investment Choices/flexibility
- Fee schedule / Commission Schedule
- BD Support, Marketing, Time Savers
For more information on how we can support you download this presentation
For advisors seeking a friendly/compliant business model and firm, we offer several solutions below.
Fee-Based RIA | Hybrid | BID | Insurance
Fee-Based RIA
We offer a complete menu of Fee-Only platforms.
Hybrid
We work with several B/Ds that offer a Hybrid friendly model including many OSJ’s.
BID
We have over 20 years working with many of the top Broker Dealers.
Insurance Professionals
We work with many captive and non-captive Insurance Entities.
Buy | Sell | Value Your Financial Services Practice
The last 5 years of the Financial Services Industry has been a slow growth period for many Financial Advisors. Growing an Advisory Business organically during this period has been challenging for many Advisors.
On the flip side, new government regulations have made many Advisors simply want to exit the business. Put these 2 factors together and the business is ripe for buyers and sellers of Advisory practices.
Just like any other entity, an Advisory practice needs a valuation done by an experienced & credentialed professional and maybe by more than one. Also, there needs to be a financing conduit to provide reasonable terms for each side.
Our firm serves as a middleman, matching buyers and sellers. Below are details regarding the process.
Valuation Methodologies
- Asset-based (not used)
- Income stream (best for large practices / offices)
- Multiple of revenue (market based / comparative sales )
Valuation Factors Revenue Multiple
- What % of clientele will transition to buyer
- Factors that could impact:
- External sale (third party) vs. Internal sale (partner)
- Length of time client has been with advisor
- Amount of advance notice and consulting with clients
- Amount of post/closing support offered by new owner
- Evaluate stability of the revenue
- Factors to consider:
- Revenue sources
- Transactional
- Trails
- Management Fees
- Growth potential of fee income
- Growth potential of client base
- Demographics of clients ( are there too many clients over 70)
- Concentration risk (revenue is limited to a few clients)
- Revenue sources
- Practices with cash flows over $1M annual GDC tend to have higher multiple valuations
- Practices at $200k annual GDC and below tend to have lower multiple valuations
- Common Multiples:
- Non-recurring revenue: 0.3x the trailing 12 months to 1.0x
- Recurring revenue: 1.16x the training 12 months to 2.3x
Other Potential Impacts on Valuations
- Few if any systems or processes are uniform (negative impact)
- Overall client’s average age over 65-70 (negative impact)
- Clients are widely dispersed across many regions (negative impact)
- Extensive variation in product usage (negative impact)
- Minimal client interaction (negative impact)
- Frequent client complaints (negative impact)
- Practice is in decline/distress (negative impact)
- Practice is run as a business-not as sole practitioner (positive impact)
- High use of fee based/recurring solutions (positive impact)
- Declining practice profitability (negative impact)
- Significant amount of unprofitable client relationships (negative impact)
- Untapped potential for insurance sales (positive impact)
- Assets in depletion and/or payout phase (negative impact)
Deal Structure Highlights
- Deal structures vary and may consist of one or more of the following:
- Down payment
- Promissory note
- Earn out
- 3-5 year & 6-8 year earn out periods are common
- seller typically earn more total compensation
- seller helps transition the book
- seller guarantees a minimum level of performance
- retention targets based on the expected number of assets
- revenue or clients that will be retained through the deal