Report excerpt — SAM H1 2026
The Multiple Ladder, Practically Applied
What advisory practices command in 2026, band by band. Excerpted from The State of Advisor Movement.
What's inside
Valuation talk in this industry runs on anecdotes and headline multiples. The multiple ladder replaces both: the documented bands practices actually transact in, what separates a 7x firm from an 11x firm, and how the private-equity capital stack above the market sets the ceiling. This excerpt carries the ladder exhibit verbatim from the full report.
- The valuation bands practices actually transact in
- The drivers that move a firm up a band
- How the PE capital stack sets the market's ceiling
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Why a ladder, not a number
The median RIA transaction priced at a record 11.6x adjusted EBITDA in 2025, but no practice sells at the median. Firms transact in bands: founder-dependent practices with mixed revenue price in the single digits, durable fee-based firms with second-generation talent price near the median, and scaled fast-growing firms with institutionalized management price into the mid-teens. The ladder documents the bands and, more usefully, the drivers that move a firm between them.
What moves a firm up
Recurring-revenue share, organic growth rate, margin, client demographics, and team depth versus founder dependency. Founder dependency is the most common one-band discount in the market and the most fixable one, if succession work starts two to three years before a process. Revenue quality outweighs revenue size: a smaller firm with clean recurring fees and younger clients can out-price a larger transactional book.
Common questions
What is a financial advisory practice worth in 2026?+
It depends on the band. The median RIA transaction priced at a record 11.6x adjusted EBITDA in 2025; founder-dependent practices with mixed revenue price meaningfully below that, while scaled firms with institutionalized management price above it, with premium platforms in a 9-16x band. Practices sold under a broker-dealer trade on revenue multiples instead, typically between one-and-a-half and three times trailing recurring revenue.What increases the value of an advisory practice before a sale?+
The documented drivers: raising recurring-revenue share, sustaining organic growth, protecting margin, improving client demographics, and above all reducing founder dependency by building second-generation coverage. Most of these need two to three years of runway before a process to move the multiple.Why do private equity platforms pay higher multiples?+
They buy growth and recurring revenue quality at scale, fund it with leverage and sponsor capital, and underwrite to their own exit in five to seven years. Their bids set the market's ceiling, which is why the capital stack above the advisory industry belongs in any serious valuation conversation.