SkyView launches digital matchmaking platform for adviser M&A

firm hopes its new service can become a Zillow for adviser deals

Oct 10, 2019 @ 5:19 pm

By Ryan W. Neal

SkyView Partners, a correspondent lender focused on the independent financial adviser market, has a new digital platform it hopes can become the Zillow for buying and selling wealth management practices.

Advisers interested in selling a firm can list it on SkyView's Advisory Practice Board of Exchange, or APBOE, and search for prospective buyers according to a score assessing the buyer's creditworthiness and preparedness to acquire. The score is generated by 31 data points verified by APBOE's staff.

Buyers can likewise search for sellers, and APBOE will protect a firm's anonymity by only allowing verified sellers to view buyer profiles.

APBOE requires sellers to work with a merger and acquisitions consultant, which SkyView CEO Scott Wetzel said promotes anonymity and productivity. Four firms — Echelon Partners, DeVoe & Company, Smart Concepts Group and Advisor Legacy — are all on the platform at launch.

[Recommended video: Michael Kitces: Efficiencies become crucial for advice firms when they grow]

"Financial advisers nearing retirement oftentimes utilize a 'for-sale-by-owner' approach for which is often times their most valuable asset," Mr. Wetzel said. "Those transactions rarely close and if they do, the buyers and sellers experience tremendous heartburn in the process."

There is no subscription fee to use APBOE. The hope is that by using the platform, advisers will turn to SkyView to finance the transaction, but Mr. Wetzel said there is no obligation to do so.

SkyView is far from the first company hoping to launch a digital marketplace for adviser M&A. According to Echelon Partners, there are at least 11 other M&A matchmaking services for the wealth management industry and several other companies that offer to help connect buyers and sellers without a dedicated online platform.

Echelon Partners CEO Daniel Sievert said what separates APBOE is that it is designed to avoid annual fees, unresponsive do-it-yourself sellers, unfiltered buyer inquisitions and lack of access to financing for larger deals.

[More: How important is financing for selling advisers? Very]

"Online M&A has been a tough value proposition as most buyers and seller have been left frustrated by annual fees, low quality offerings, very low volume of deals that match buyer specifications, non-existent support, and promises of deeper services that amount to vaporware," Mr. Seivert said in an email.

Mr. Wetzel said he isn't familiar with other platforms and services out there but is confident ABPOE's user interface and requirement to use an M&A consultant will make it an attractive destination. His goal is less about taking market share from other platforms and more about increasing the number of advisers selling their practices before retirement.

"We need the size of the M&A marketplace to increase," Mr. Wetzel said. "Only 2% of advisers retire with a liquidity event and sell their practice at retirement. If we can move that number to 5% or 10%, it's a huge win."

Fueled by mergers and acquisitions and a bull market, the size of RIAs as measured by assets under management has exploded. The number of RIAs with $1 billion or more in client assets has grown 54% in the last five years, from 216 firms in 2014 to 338 firms in 2019, according to SEC filings.

[More: RIAs acquiring firms at record pace]

"We continue to see record RIA M&A and with that, the industry is coming up with more ways to help advisers find the right match," said David DeVoe, founder and CEO of DeVoe. "SkyView's new program is one more option. We're happy to support advisors with transactions regardless of the channel they come through."


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