Portfolio Warning: The Private Equity Takeover of Advisors

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This is important. This is a portfolio saving tip. Tip, rule, law, pay close attention. If you are working with a financial advisor, I don’t care what firm it is, pay very close attention. Now I’ve got to go back in time. Might be a new listener here. Again, I’ve told this to many people. What’s happening right now in the financial planning advisory business is private equity has stepped in.

Private equity stepped in much like they stepped in with veterinary clinics, plumbing, HVAC, you name it, and they are wrecking businesses. They love, they love financial advisory firms. They love RIAs because of the cashflow, because they’re able to say, look at the cashflow. They’re able to mess around with the valuations and charge their investors

a ridiculous multiple. Okay, what am I getting at? How does this affect you? How does this matter to you and your portfolio? Well, many advisors are selling. They’re selling their business, looking to retire, whatever it may be. And they are, mean, it’s like winter to them, it’s like winter, winter chicken dinner. I can’t believe I just sold my business at a 10 times multiple, a 12 times multiple, a 15 times multiple. That, that and quite frankly, if you want more information, and I will explain to you the valuations and how they work, contact me is insane.

It’s patently absurd. It’s insane. And it’s been going on for some time now, going on for some time now. And, well, I’m starting to get phone calls. I’m starting to get phone calls from advisors that sold their business that are now distraught, distraught because their clients are getting destroyed by these new firms.

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Nothing they can do about it. Non-commit. can’t talk. They can’t contact. They can’t do anything about it. Quite honestly, quite honestly, they, the advisors were greedy. They should have known better.

They should have known better. They had like Animal House. They had the devil and the angel on their shoulder and they went with the devil. What you didn’t you didn’t give it the slightest thought on how this private equity firm was going to go ahead and make this business your business profitable at a moronic multiple that nobody in their right mind would pay. Well, yeah, that’s starting to happen.

Starting again, it’s one big fat see I told you so moment. Here is my portfolio saving tip if you’re working with a financial advisor. They’re I mean, not always the case because we are bringing on financial advisors all the time guys that are looking to retire. But let me tell you something. We give multiples that make sense. We have multiples that make sense. We are not going to be selling.

private equity to the clients, basically the clients buying into their firm that they’re working with, it’s an absolute disaster. You need to ask your advisor, advisor approach, oh, you know what, I’m looking to retire or, you know, we’re going to move a business, we’re going over to this firm over here. You need to ask them. You need to ask them and they cannot lie to you. Make that perfectly clear. You have to tell me, oh, you’re doing this, you’re selling your business, you’re looking, that’s great. Okay.

What is the multiple you’re selling at?

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And if they say, I don’t have to tell you that. say, yes, you do. Yes, you do. And if you’re not going to tell me, I’m moving my account.

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And if it is any higher, any higher than four, I’ll give you that, any higher than a four time multiple. And again, reach out if you don’t understand what any of this means, I can get into it. If it’s any higher than a four times multiple, leave. Leave immediately.

immediately because you’re going to get burned. Mark my words. Okay, mark my words is going to be a massive fallout coming down the road. It’s already starting to happen. This is a portfolio saving tip for anybody out there that is working with a financial advisor. They come to you. I’m looking to retire. I’m looking to sell my business. I want to get out. we’ve got this great opportunity to merge with this firm or this firm is going to take over your business. Ask that question.

Okay, fine. I need to know what the multiple was. And you can’t lie, they have to tell you.

Trust me, Watchdog on wallstreet.com.