After working with thousands of advisors over the years, we have seen thousands of different scenarios and requests for financing. Due to this, we frequently receive the question: what types of financing are you able to provide, and whom can you work with? In general, the below are the overreaching types of financial advisor and RIA loans we provide. If you are unsure what your financing needs would qualify as, reach out to one of our representatives today.
Acquisition Financing
Financial advisor acquisitions occur when one advisor acquires clients from another advisor. This can be a full acquisition in which they purchase every client from the selling advisor, or a partial acquisition in which they only purchase select clients from the selling advisor. There are a variety of reasons that a purchasing advisor would look to acquire clients. Some of these reasons include the ability to grow at a faster rate than organic expansion, to diversify in to new geographic areas or niches, to acquire new staff capabilities if retaining staff members, and to grow overall AUM and revenue numbers. At the same time, selling advisors may be selling their practice for a variety of reasons. While we frequently see selling advisors getting ready to retire, we also see selling advisors that are either trying to streamline their own practices and only selling a select number of clients, trying to reduce their overall workload, or looking to maximize other efficiencies.
Partner Buy-Outs
Partner buy-outs occur when one partner in a partnership is selling either their full practice, or a portion of their practice, to one or multiple of their partners. While we frequently work with individual advisors or RIAs that are selling their entire practice to one of their partners, we also frequently work with individual advisors and RIAs that are looking to begin conducting their succession plan or diversify their own portfolios by selling equity in their practice to their partners. Because of our experience working with partner buy-outs, we can give general guidance on how we've seen these structured in the past, and provide referrals to some of our preferred partners that can provide more in-depth guidance and assist with the transition.
Breakaway Advisor Loans
The third category of advisors we work with includes advisors that are transitioning from working at a traditional wirehouse or broker dealer and moving further towards independence, whether that means opening their own RIA, joining another RIA, or finding an independent broker dealer. Advisors looking to move toward independence may be required to purchase their clients from their existing firm in order to make the move, and for well qualified individuals we are able to work with you on the financing for this.
Refinances
An additional category of RIA loans that we can provide financing for includes working with registered investment advisors that have existing acquisition or partner buy-out loans and are looking to refinance these to receive better terms. Additionally, we frequently work with RIAs that have an existing loan and need additional capital for acquisitions or partner buy-outs and find better terms available than what their current lending partner offers. Dependent upon the size of your loan, you could be losing hundreds of thousands of dollars - or even millions of dollars - if you don't have the best terms available.
Working Capital
For well qualified individuals and firms, we can provide additional working capital for specific business purposes. Frequently, we see this capital being used for marketing events to attract new clients and therefore revenue, to bring additional new talent on board, or to optimize efficiencies within the firm. Most commonly working capital is provided in conjunction with a loan that falls under one of the above categories.
Next Steps
No matter what your scenario entails and regards, the next steps for yourself as an advisor or investment advisor is to reach out to one of our qualified representatives and have a preliminary conversation. From here, we will learn more about your scenario and provide further guidance as to what the loan process looks like and how we may be able to assist. Learn more and connect with us!
