No trend has dominated the RIA business over the last decade to the degree consolidation has. As private equity has discovered how lucrative financial advice can be and how sticky advisors’ relationships with clients are, private capital has flooded the industry.

It was inevitable that a cottage industry like the RIA profession with tens of thousands of firms would experience a wave of consolidation. As professionals have aged, it’s understandable they would seek retirement security for themselves and a smooth transition-succession plan for both clients and employees.

Today, rarely a week goes by without several announcements of RIA mergers or acquisitions. But if selling a firm that one has spent most of their adult life in is financially rewarding, it hasn’t always been a path to personal fulfillment.

All advisors who launched their own firms were entrepreneurs, and more than a few found the jolt of reporting to a large organization difficult. Moreover, those who sold their firms in a prior decade to banks, many of which once were enamored with the RIA space, found their parent company was seriously distracted by the financial crisis. So were private equity buyers with their love of leverage.

In this story, Financial Advisor profiles four RIA firms whose principals sold their firms and, for various reasons, bought them back. Along the way, they learned a variety of lessons, not the least of which was the value of sharing equity.

Judy Shine

Shine Investment Advisory Services

Early in 2008, Judy Shine was talking to a professional colleague who had recently sold a majority interest in his firm to Phoenix-based Western Alliance Bancorp. The colleague had nothing but kudos for the acquirer.

A midsize RIA with $350 million in assets in the Denver suburbs, Shine Investment Advisory has always punched above its weight. Having held casual talks with other acquirers, Shine decided to get serious with Western Alliance. By early 2008, a transaction was completed, with the bank buying 80% of the firm and Shine retaining 20%.

In retrospect, Shine concedes she wasn’t particularly sophisticated. “When you only do something once, you are not very good at it,” she says.

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