Pandemic Pressures on Aging Advisors Creates Opportunities For Acquisitions

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Pandemic Pressures on Aging Advisors Creates Opportunities For Acquisitions

The past few months have been stressful for many advisors. Managing client fears while shifting operations to remote work and monitoring fluctuating markets has many advisors ready to exit for good. Many experts see this as the catalyst to trigger the “age wave” of retiring advisors that they have been predicting for the past couple of years. The expected surplus of selling advisors, coupled with the pressures of the pandemic, may create a landscape of opportunity for advisors looking to grow through acquisitions.

It’s no secret that the majority of advisors in the industry are nearing the typical retirement age. High performing markets have kept many in the game longer than expected. Coupled with personal motivations for delaying selling, this has created a situation where the market has had considerably more buyers than sellers. If the pandemic turns out to be the trigger analysts predict, the supply of practices for sale may skyrocket. If supplies rise while demand remains relatively constant, we may see a downward pressure on prices, which we haven’t seen in many years.

Altogether, this creates a perfect storm for a major industry shift and mass consolidation among small and mid-sized firms. Advisors eager to take advantage of this shift will want to do the groundwork now to be able to move quickly when deals arise. This includes securing a lending partner to finance the deal, as well as working closely with your internal succession team or external acquisition consultant who can help you locate deals.

If you are looking for a lender to help you finance an acquisition, you can schedule a call with one of our lending team members who can discuss your options and help you prepare for a successful acquisition.