5 Hot Takes From An M&A Executive
We’re back this week with more from my guy Kyle Campbell. He has been doing M&A in the wealth management industry for nearly a decade. He is a Certified Valuation Analyst, is currently Senior Vice President of Corporate Development at OneDigital, and has closed approximately 500 transactions. I have known him for about ten years.
If you have been following along the last couple of weeks, you have probably noticed that Kyle has had a significant presence in this newsletter. I make no apologies for that. When someone has closed nearly 500 transactions and keeps saying things I have not heard anyone else say quite as clearly, I am going to keep putting it in front of you. Consider this your formal introduction to the Kyle Campbell fan club. Membership is free, and the content is good.
Regular readers have seen me write about the rollup model question, succession timing, and what it actually costs to take a partial sale from a platform with its own incentives. A lot of my own convictions on these topics have come from the combination of my own experiences with advisors and Kyle putting clear explanations to how it works. I figured it was time to put him on camera and let him make the case directly. We sat down for a full conversation, and it went further than I expected. Here is what landed hardest for me before you watch it.
(You can watch the full interview here on YouTube)
The Five Things That Stuck With Me
Now, for the busy skimmers among us, here's my roundup.
1. Most advisors don’t compare types of acquirers with much attention.
The first tier is what he calls the buddy level. It’s usually a peer or slightly larger firm that acquires you, typically for strategic or personal reasons. These deals are often relationship-driven, sometimes underpriced, and frequently misaligned with what post-acquisition life actually looks like for the seller.
The second tier is the strategic acquirer, a firm with a real operational thesis, usually seeking to enter a market, add a capability, or hit a scale threshold that unlocks something for its own capital structure. These buyers are more sophisticated, more deliberate, and often more willing to pay for something specific that you have built.
The third tier is the PE mothership at the top of the food chain. This is the firm that has already aggregated a platform and is now either pursuing an exit or continuing to bolt on acquisitions to support it. The motivations here are almost entirely financial, the hold period is defined before the ink is dry, and the culture of the acquired firm is largely irrelevant to the thesis.
Kyle's thesis is that most advisors start with an assumed direction towards one of these and never really do thorough due diligence about a comparison between each platform. I would agree.
2. Partial sales are almost always a bad deal for the seller.
Kyle said he is unashamedly against partial sales for most advisors. It is not because the liquidity event is not real, but because of what it does to your options downstream. While I agree it's a bit of a blanket statement, I see the specific argument he makes play out frequently.
Here is the core argument: when you sell a partial stake to a platform or aggregator that has its own interest in keeping your assets in place, you have introduced a third party into every future transaction you might want to do. That party has equity visibility into your business, contractual rights that may govern how and when you can sell the rest, and a financial incentive to slow or complicate a future transaction that takes assets off their platform.
Kyle's number: In his experience, there is maybe a five to ten percent slice of situations where a partial sale genuinely makes sense. It’s typically where the seller needs liquidity for a specific reason, has negotiated unusually clean exit terms, and has done the work to understand exactly what they are giving up. For the other ninety to ninety-five percent, the partial sale that felt like a smart liquidity event at signing almost certainly deflated the terminal value of the remaining stake in ways that only become visible years later.
3. When a large platform takes an equity stake in your firm, your buyer pool shrinks.
This one deserves to be read carefully because it is easy to dismiss as cynical and harder to dismiss once you understand the mechanics.
Large platforms (and Kyle named LPL specifically in our conversation) do not generate their primary revenue from servicing advisors. They generate it from the cash sweep. Keeping assets on the platform as long as possible is the core business. Everything else is infrastructure that supports that objective.
When a platform takes an equity stake in your firm, they now have three things: visibility into your financials, contractual rights that may govern a future sale, and a financial incentive that is not aligned with maximizing your terminal value.
Kyle's framing was direct: there are now three parties in the relationship, and one of them did not come to the table to help you get the best possible exit. A qualified third-party buyer who wants to take your assets off that platform is, from the platform's perspective, not an outcome to facilitate.
In practice, the result is that your buyer pool shrinks, not to zero, but the universe of buyers who can transact cleanly, without navigating a platform's equity rights and contractual provisions, is smaller than it was before you took the check.
4. The question of whether the rollup model is dead is worth taking seriously.
Kyle made the case directly: the traditional PE-backed rollup playbook has run into structural problems that do not have an easy fix. (We wrote about this at length last week.)
The model depended on a chain of buyers, each willing to pay a higher multiple for a larger entity. That chain required cheap capital, a growing pool of buyers at every level, and multiples that made financial sense relative to the underlying business. Kyle's take on current RIA valuations: some firms are trading at 23x EBITDA. The top 50 publicly traded securities in the world trade at that multiple. There is no buyer pool deep enough to sustain that math at scale across an entire industry.
Add to that a cost of capital that has changed materially, PE hold periods that have nearly doubled from four or five years to approaching a decade, and a market that is visibly shifting from aggregators (firms that just needed to get big) to integrators, firms that actually have to build something operationally durable to justify the price they paid.
Kyle's read is that the rollup era is over, or at least on its final lap. What replaces it is slower, more selective, and more demanding of the firms being acquired. That is a different environment to sell into than the one that existed five years ago.
5. The succession timing window is more consequential than most advisors realize.
This is the one that I think has the most practical urgency for advisors reading this right now.
Kyle's observation: a significant number of advisors who would have sold in the last several years have not.
Markets have been exceptional.
Revenue is up without any particular effort to grow it.
The business feels healthy.
There has been no forcing function that made the succession conversation feel necessary.
What happens when the forcing function arrives (a market correction, a health event, a compliance change, or simply the accumulation of years) is that a large cohort of similarly situated advisors hits the market within a compressed window. Supply increases rapidly. The buyer pool, already under pressure from the dynamics above, does not expand to meet it. Valuations respond to that imbalance in a predictable direction.
Kyle was careful not to call a specific timeline. His point was the structural argument: the conditions that currently favor a well-positioned seller are not permanent, and the advisors who have that conversation from a position of strength while the business is healthy, while the market is favorable, while they have time to be selective, are going to get materially better outcomes than the ones who wait until something forces their hand.
The full conversation covers all of the above in considerably more depth than I can do justice to here. If you are at a stage where M&A, succession, or a partial sale is part of how you are thinking about the next chapter of your business, this is the most useful forty minutes you will spend this month.