Acquiring Advisor Teams That Are Over-Staffed
There’s a quiet truth in this industry that few buyers are rushing to put in a deck: Some of the best-run advisory firms are intentionally overstaffed.
Not bloated. Not inefficient. I compare it to buying a house that someone has proudly maintained for 30 years. They may have spent above average to replace the roof because reliability and durability mattered more than if they were flipping it. I see lots of owners with this same mentality. They’re willing to trade their own margins (somewhat) for higher reliability.
I’ve worked with plenty of firms in the $300–500 million range who will tell you straight up: “Yeah, we’re overstaffed. And we’re proud of it.” They’re not trying to squeeze every last dollar out of EBOC. They fall into the “pride of ownership” camp.
The Value in the Why
These firms aren’t over-investing in their teams by accident. They’re doing it on purpose because the payoff shows up somewhere else:
Clients who feel known and well taken care of
Staff who show up early, stay late, and stick around for years
Local reputation that drives organic referrals without much marketing
Lots of buyers–especially in private equity–look at staffing as a line item, but these owners know that it’s one of their best value-preserving investments. Long term, they’ll outperform firms with better marketing and a flashier website because their team is bought in and will pick up the phone at 7pm on a Friday.
What They Give Up (On Paper)
Will a firm like this command the highest possible multiple? Probably not. If you want the highest possible multiple, you’re looking for a different kind of buyer. Buyers looking for tight margins and lean headcount often mark them down. Too much service staff. Too much payroll. Too many “non-revenue-generating” roles.
But for the founder, that’s usually a known trade-off. They care more about:
Keeping the team intact after a sale
Preserving the client experience that built the firm
Ensuring their name still means something in the community post-transaction
In other words, they’re optimizing for continuity, not for extraction.
What Buyers Miss When They Fixate on the Spreadsheet
Many buyers love clean math, but the P&L often does not tell the whole story. Some of the firms that look overbuilt on paper are the same ones that:
Can operate without the founder present
Have systems and roles that are already transferable
Come with clients who are loyal to the team, not just the lead advisor
That’s not bloat. That’s the value that matters far more.
The Real Question: Can It Run Without You?
If you’re thinking about selling, or buying, here’s the simplest filter:
Can this business keep running — well — if the founder takes three weeks off?
If the answer is no, it probably needs more teams.
If the answer is yes, it might already be built for scale… even if the margins are a little messier than what the consultants recommend.
How It Affects Your Exit
If you’re an advisor who has intentionally “overbuilt” your practice, there are buyers out there with strong offers who prioritize the kind of culture you’ve established. It’s usually because they’ve built their own businesses on a common set of core values, and they want to acquire businesses with a similar set of values.
I’ve personally spent a great deal of time connecting buyers and sellers with this distinction. If you want to explore more of what’s out there instead of fielding the PE/BD bidding war, let’s connect. It’s just a matter of knowing your options.