6 Actions RIA Firms Should Take in 2023: DeVoe

David DeVoe, DeVoe & Company

There are complexities in expanding to a new country and “it’s not just setting up a post and opening up an office,” he said.

“But I think Europe — France, even England, in particular — I think are probably more attractive environments than other places,” and there have been conversations about Australia. Brazil and Canada are also worth considering, he said.

3. Consider M&A deals now instead of waiting for a return to normal.

Within the current environment, an RIA firm owner might decide to punt on potential mergers and acquisitions, DeVoe said.

But most buyers are “sophisticated,” often including “CEOs and leadership teams that have been in this for 15-18 years or more … They’re really designing this with an intelligent thoughtfulness” and know that RIAs tend to do well during a crisis and after one, he said.

But a firm’s valuation and consideration factored in during a potential merger or acquisition are typically based on factors that include a strong, loyal client base and whether the business is growing, he said. “Buyers want to have growth machines.”

4. Put a succession plan in place.

Too many advisory firms still don’t have succession plans. “If you don’t have it, it’s time” to put one in place, DeVoe said. For one thing, it shows future leaders at the firm that you want them to share in what you are building.

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Meanwhile, the firm is going to be worth more to external buyers if there is a succession plan, he added.

5. Put a growth plan in place.

“The benefits of scale … are real,” and there are benefits to teaming with a larger firm, DeVoe said, explaining the importance of having a growth plan for your firm.

6. If you’re exploring a deal, make sure to find a firm and partner that are the right fit.

Make certain that your firm has synergies with another firm you’re interested in buying or merging with, according to DeVoe, who noted the significance of such a deal for an RIA firm and its owner.

If you are looking for a partner, make sure to select one who will help you achieve your goals and objectives, DeVoe added.

(Pictured: David DeVoe, CEO and founder of DeVoe & Co.)