Why Enterprise Value Is the New Payout Grid
The advisors making the smartest moves in 2025 aren’t asking what the grid pays. They’re asking what their practice will be worth in ten years.
Every November, the wirehouses update their compensation grids. The thresholds rise, the hurdles shift, and advisors producing the same revenue as the year before, take home a little less. Morgan Stanley raised grid hurdles by 10% in 2024. UBS trimmed core payouts by up to four percentage points. Merrill eliminated pay on households under $250,000 entirely. Janney’s 2026 plan cuts total compensation for $1 million producers by 8%.
The pattern is consistent and well-documented. The grid is a tool for managing firm margins and it usually moves in one direction.
Meanwhile, a parallel economy has quietly emerged. Independent RIA practices are selling at median EBITDA multiples of 11x — a 37.5% increase from 2020, according to Advisor Growth Strategies. Private equity accounted for 53% of all RIA acquirers in Q2 2025. RIA M&A deal volume is on pace to shatter all previous records this year. The buyers are serious, the capital is real, and the multiples are high.
Advisors who own their practice are sitting on a valuable, transferable asset. Advisors at wirehouses own nothing but next year’s grid.
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“The firms winning advisor talent aren’t just offering better economics today; they’re offering a credible path to building lasting, transferable enterprise value.” |
What Buyers Are Paying For
Enterprise value in an advisory practice is built on a few well-understood drivers. Recurring, fee-based revenue commands the highest multiples — practices with 90%+ fee-based revenue are valued measurably higher than those with significant transactional exposure. Beyond revenue quality, buyers are pricing:
— Client retention and demographics: a growing, diversified client base with strong loyalty and low concentration risk
— Technology and operational efficiency: scalable systems that reduce dependence on any single person
— Team depth: a defined next generation of leadership that mitigates succession risk
— Growth trajectory: organic AUM inflows of 5–10% annually command premiums above market averages
Only 42% of RIA firms have a written succession plan, the lowest rate on record. Firms that do, command better valuations and faster closes. Firms that don’t are leaving money on the table, often without knowing it.
The Math Worth Running
An advisor generating $1 million in revenue at a wirehouse, keeping 45% after grid, takes home $450,000. An independent advisor on a supported platform keeping 75% takes home $750,000 and builds a practice conservatively worth $3 million at current recurring revenue multiples.
That is a $3 million asset accumulating alongside a larger annual income. The gap compounds every year.
The supported independence model has matured to the point where advisors can own their practice and their economics without building operational infrastructure from scratch. The friction of going independent has dropped significantly. The cost of staying put has risen quietly but steadily, one grid update at a time.
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“The advisors who will look back on 2026 as their defining career move aren’t necessarily the ones who found the best platform. They’re the ones who started thinking like owners.” |
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BROKERHUNTER SELECT Ready to explore what your practice could be worth? BrokerHunter SELECT works directly with experienced advisors navigating a career-defining transition. Confidential, personalized, and no pressure. |
Sources
Advisor Growth Strategies, “RIA Deal Room,” 2025
Mercer Capital, “Private Equity’s Growing Influence on RIA Dealmaking,” September 2025
BlackRock Advisor Services, “Boost Your Financial Advisory Firm Value for M&A,” 2025
ECHELON Partners, RIA M&A Deal Report, Q2 2025
CircleBlack, “50+ Key RIA Industry Statistics,” 2025
AdvisorHub, “2025 COMP: UBS Trims Teaming Bonus,” November 2024
Financial Planning, “What to Expect in Advisor Pay in 2025,” April 2025
Cerulli Associates, 2025 Advisor Outlook
