Salt Creek Blog
How To Do A Claw Back On An Advisor Acquisition
How To Do A Claw Back On An Advisor Acquisition
In a previous post we discussed a few of the protections buyers can put in place to preserve their interests during an acquisition. The primary purpose of the protections is to minimize client attrition and preserve the value of the practice being acquired. One of those protections, a claw back, is one that M&A experts most highly recommend for protecting buyers and ensuring seller participation in the transition of clients. In this post we will discuss the mechanism for how a claw back works on an advisor acquisition.
As a rule of thumb, a claw back clause states that if a certain percentage of assets aren’t transferred within the claw back period (usually 12 months), then the purchase price is adjusted to reflect the attrition of client assets. Buyer and seller can agree to any percentage, but the industry standard is a 90% retention rate (so maximum 10% decrease in assets) within the 12-month period.
In terms of the actual
Read More
Read More
Recent Posts
-
How To Do A Claw Back On An Advisor Acquisition
How To Do A Claw Back On An Advisor Acquisition In a previous post we discussed a few of the protections buyers can put in place to preserve their interests during an acquisition. The primary purpose of the protections is to minimize client attrition...
Read More -
Leveraging Broker Dealer Resources During an Acquisition
Leveraging Broker Dealer Resources During an Acquisition Acquisitions can be a positive and exciting way to grow a financial advisor practice. They can also be challenging. There are many resources available to advisors that can help alleviate some...
Read More -
Pros and Cons of Purchasing Acquisitions Outside Your Broker Dealer
Pros and Cons of Purchasing Acquisitions Outside Your Broker Dealer Advisor interest in acquisitions has grown tremendously over the last few years. Practices of every size have gotten in the game, even if only to make a single acquisition. Advisors...
Read More -
Strategies Advisors Are Using To Find Acquisition Deals
Strategies Advisors Are Using To Find Acquisition Deals As access to capital has improved, the number of advisors looking to make acquisitions has greatly increased. Buyers still far outnumber sellers, which has helped to make competition fierce. Although...
Read More -
How A Fluctuating Economy Impacts Advisor M&A
How A Fluctuating Economy Impacts Advisor M&A Financial advisors are always hyper aware of fluctuating markets and how those markets impact their clients. This is especially true during sudden downturns, which can cause many clients to become fearful...
Read More -
Key Changes To Make During A Partner Buy-In
Key Changes To Make During A Partner Buy-In Buying into a financial advisory practice can be a very exciting endeavor. The potential to grow professionally and personally are what often drives advisors to make this change. An equity purchase doesn’t...
Read More -
Financing Options For Making An Equity Purchase In A Financial Advisory Practice
Financing Options For Making An Equity Purchase In A Financial Advisory Practice Financing options have improved for financial advisors over the past few years. This greater access to capital solutions allows advisors of every age and experience level...
Read More -
Advisor Loans: SBA Versus Conventional Loan Programs
Advisor Loans: SBA Versus Conventional Loan Programs In years past advisors had to rely on personal assets, cash, and seller financing to buy equity or fund growth initiatives. Now financial advisors have greater access to capital through a variety...
Read More -
What We Do and How We Can Help
What We Do and How We Can Help At Salt Creek, we are dedicated to helping financial advisors and RIAs expand their firms with efficient access to capital. It’s our goal to help you grow your firm. We exclusively serve financial advisors and we...
Read More -
Using Acquisitions To Secure Talent
Using Acquisitions To Secure Talent Over the past two years, several environmental pressures have forced advisors to change how they do business. The pandemic alone drove the industry to adopt remote work, virtual meetings, and new protocols to ensure...
Read More