Hosts: Alan Darby & Jaclyn Martinez
Guest: Elizabeth Guidi, Tax Attorney at Kilpatrick Townsend

Your transaction outcome isn't just about the headline price - it's about what you actually keep after taxes. Most sellers focus on valuation multiples but miss how deal structure can dramatically impact their after-tax proceeds.

Asset purchases with rollover equity often beat straight stock sales from a tax perspective. The "structure first" mindset can save significant dollars compared to focusing solely on purchase price negotiations.

Purchase Price Allocation

• How assets are valued affects your tax treatment
• Goodwill allocation and step-up in basis implications
• What actually moves the needle on your tax bill

Payment Timing Strategy

• Earnouts vs cash today - the tax timing trade-offs
• Working capital adjustments most sellers don't see coming
• Escrow and indemnity tax implications

Entity Structure Traps

• S-corp, LLC, and C-corp nuances that catch sellers off-guard
• Why your business structure affects deal taxation
• Planning moves that should happen before you start negotiations
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Hidden Tax Landmines

- State and local tax surprises that can derail your planning- Geographic considerations most advisors overlook- Compliance requirements across different jurisdictions

Pre-LOI Tax Checklist - Simple framework to get tax planning on track before negotiations begin. Getting tax and legal advisors involved early lets you design the optimal structure instead of retrofitting tax planning to a completed deal.

Elizabeth's Key Insight - Every deal is unique. Cookie-cutter approaches to M&A taxation leave money on the table. The biggest wins come from structuring transactions intelligently from the start, not trying to minimize taxes after the deal terms are set.

Bottom Line - Smart tax planning isn't about finding loopholes - it's about legally structuring your transaction to keep more of what you built. Start the conversation with tax advisors before you sign the LOI, not after.

The Big Myth

Most advisors think selling their firm means they have to retire immediately.

Reality check: Less than 5-10% of sellers actually want to exit within 12 months.

• Client relationships are everything - "Is my advisor changing?" is their #1 concern
• Buyers inherit your succession problems and need time to solve them
• Post-acquisition growth is where buyers make their real money

Three key motivators:

1. Money - De-risk your asset, take some chips off the table
2. Quality of Life - Get rid of compliance, operations, billing headaches
3. Growth - Access better systems, resources, and opportunities

• Earnouts based on future growth
• Revenue sharing on new business (20-40%)
• Equity participation in buyer's success
• Payments stretched over multiple years

As the nation's largest RIA ($300B+ AUM), they prefer strategic partnerships over quick flips:

• Want founders to stay 12-24 months minimum
• Focus on cultural fit and growth mindset
• Take over back-office stuff, you keep client relationships

Modern M&A is about partnership and scaling your impact, not cashing out and disappearing. The best buyers want you to stick around and grow together.

Perfect for advisors considering M&A or wondering what really happens post-transaction.

For RIA principals navigating a merger or acquisition, one of the most challenging decisions is determining the right moment—and method—to share the news with their team. In this crucial episode of The Buyer's Boardroom, hosts Allen Darby and Jacqueline Martinez tackle this sensitive topic, drawing from real-world experiences, including those "awkward moments" many leaders hope to avoid. 

Allen and Jacqueline delve into the critical best practices for preparing and delivering this significant announcement. They explore the nuanced considerations around timing, discussing the pros and cons of informing key team members pre-LOI versus waiting until an LOI is signed. A key point of discussion revolves around the inherent risks of waiting too long, such as an employee catching wind of a potential deal months in advance and seeking opportunities elsewhere, leading to unintended talent loss. 

Listeners will learn valuable strategies for: 

• Strategic Timing: Weighing the 75% probability milestone (often associated with pre-LOI diligence needs or deal progression) against the risks of premature disclosure or delayed communication. 

• Thorough Preparation: The importance of meticulous planning before the announcement call to ensure clarity and confidence. 

• Crafting the Narrative: How to effectively outline what will happen next, providing a clear roadmap for the team post-announcement. 

• Consistent Reinforcement: Techniques for reinforcing key messages to ensure understanding and manage concerns over time. 

This episode is packed with actionable advice for any firm leader facing the pivotal moment of M&A communication, offering insights to help manage team anxieties, maintain trust, and navigate the transition with greater transparency and strategic foresight. 

Join the Conversation: We invite you to share your thoughts on this approach. Email your reactions to ⁠⁠⁠[email protected]⁠⁠⁠. 

Navigating M&A Deals Through Market Downturns

Market volatility got you worried about your M&A deal? Recent market downturns, even seemingly moderate ones impacting portfolios by around 6%, can significantly affect a company's sellable EBITDA, creating uncertainty for both buyers and sellers deep in the transaction process.

In this episode, we tackle this challenge head-on. Sellers understandably don't want short-term market dips to penalize their long-term value, while buyers need confidence in current valuations for their stakeholders and lenders. How do you bridge this gap and keep deals moving forward fairly?

We explore the perspectives of both parties, emphasizing that successful M&A is a long-term partnership, not an opportunity to exploit temporary market fluctuations. Discover the practical ways market activity can impact deal structure – from valuation adjustments to putting retention payments at risk.

More importantly, we dive into creative, actionable solutions that go beyond simply pausing or walking away. Learn about strategies like:

• Using historical AUM or revenue periods for valuation benchmarks.
• Structuring earn-outs tied to future dates, allowing time for market recovery or organic growth.
• Focusing retention calculations on controllable factors like net new assets, excluding market noise.
• A key technique: Giving sellers the flexibility to elect extensions on measurement periods for contingent payments, balancing risk fairly.

Tune in to understand the risks and rewards of different approaches and learn how Alaris Acquisitions facilitates constructive conversations to find mutually agreeable paths forward, ensuring deals stay on track even when markets are choppy.

Join the Conversation: We invite you to share your thoughts on this approach. Email your reactions to ⁠⁠[email protected]⁠⁠. 

In this thought-provoking episode of The Buyer's Boardroom, Allen Darby and Jacqueline Martinez discuss "10 Things That Make Your Baby Ugly" – insightful factors that can make your RIA less attractive to potential buyers. They delve into common operational, financial, and client-related issues that can significantly impact your firm's valuation and appeal. This episode provides crucial guidance for RIA owners looking to maximize their firm's attractiveness and ensure a successful M&A journey.

To cap it off, Allen sits down with Jason Gordo of Modern Wealth Management to get his take as an experienced acquirer.

Join the Conversation: We invite you to share your thoughts on this approach. Email your reactions to ⁠[email protected]⁠. 

In this episode join Allen Darby and Jacqueline Martinez as they introduce the Alaris "Lens" product. Lens is a first of its kind platform for RIA's to explore M&A, learn through though leadership articles, podcasts, etc, and explore the largest buyer dataset ever put together in one place for M&A in the Wealth Management Space. It continues to improve the seller experience through our Ideal Outcome Process and Ai Partner Matching Algorithm that works like match.com for M&A in the wealth management space, creating culture based profile matches.

This podcast episode dives deep into the complexities of RIA valuations, going beyond the simple "multiple of AUM" myth. Hosts Allen Darby and Jacqueline Martinez discuss the real drivers of valuation, including revenue mix (recurring vs. non-recurring), operating expenses, and owner's compensation. They also explore the importance of EBITDA margins, the currency stack (cash vs. equity), and deal structure (closing consideration vs. deferred payments). The episode features a conversation with Brooks Hamner of Mercer Capital, a leading valuation firm in the wealth management space, offering expert insights on maximizing your firm's value. 

Join the Conversation: We invite you to share your thoughts on this approach. Email your reactions to [email protected]. 

In this episode of The Buyer's Boardroom, hosts Jacqueline Martinez and Allen Darby delve into the nuances of internal versus external succession planning for financial advisory firms. They explore key considerations, including valuation differences, the role of equity participation, and distinguishing great advisors from great business owners.

In this episode of the Buyer’s Boardroom, Allen Darby and Jacqueline Martinez explore one of the more challenging operational dilemmas for sellers: how to deal with 1099 advisors. Here, they break down the myths and realities around the impact of 1099 advisors on firm’s value and provide strategies to optimize valuations. Nate Lenz of Concurrent joins as a special guest, offering insights from his personal experience as Co-Founder and CEO of a buyer in the space that has creatively solved for this situation. Together, they examine the best path forward. 

Join the Conversation: We invite you to share your thoughts on this approach. Email your reactions to[email protected]. 

In this episode of the Buyer’s Boardroom, Allen Darby and Jacqueline Martinez explore one of the biggest concerns for sellers: the fear of losing independence. Here, they break down the myths and realities surrounding autonomy when transitioning into a new partnership. Dean Barber of Modern Wealth Management joins as a special guest, offering insights from his personal experience after partnering with a larger firm. Together, they examine the six key areas of decision-making that sellers are most concerned about and offer practical advice on how to address these fears. 

Join the Conversation: We invite you to share your thoughts on this approach. Email your reactions to [email protected].