With valuations at historic highs and the complexity of modern M&A transactions, the stakes have never been higher.
The “sell and stay” approach in wealth management M&A is proving to be more than a trend. According to proprietary Gladstone research, there have been well over 300 sales of SEC-registered ($100M+ AUM) RIAs annually in the last five years, with 2025 looking like another record-setter. Many founders choose to remain actively involved post-sale, resulting in a shift in how mergers and acquisitions are viewed—selling no longer automatically signals an exit.
In a profession where work provides meaning and purpose, sellers increasingly choose to stay put, but success depends on how these deals are structured.
Why Leaders Choose to Stay
The motivations for a “sell and stay” arrangement are multifaceted. For some leaders, it’s about shedding administrative burdens while retaining their passion for client relationships. Others see it as a practical way to ensure proper succession planning. Additionally, with firm valuations at historic highs, many founders view this as an opportunity to secure their financial future while continuing to contribute meaningfully to the business.
Keys to a Successful ‘Sell and Stay’ Transition
The foundation of a successful “sell and stay” transition rests on several critical elements:
Clear Role Definition: From the outset, both parties must explicitly define the remaining leader’s role. This prevents future friction and ensures alignment with the leader’s strengths—whether in client relationships, business development or long-term planning.
Mindset Adjustment: Realistic expectations are crucial. Transitioning from being the primary decision-maker to part of a larger organization requires a significant mindset shift. Success comes from focusing on gained resources and opportunities rather than dwelling on changed dynamics.
Compensation Structure: Incentives should be tied directly to behaviors that drive firm success. This often includes equity participation, which ensures the remaining leader maintains a vested interest in the firm’s future growth and client retention.
Professional Guidance: A Critical Success Factor
One aspect often overlooked is the value of professional M&A advisors in these transactions. These experts bring:
- Deep industry knowledge for accurate firm valuation;
- Extensive buyer networks for optimal matching;
- Skilled negotiation capabilities for deal structuring; and
- Expertise in ensuring smooth transitions.
With expert guidance, firms can focus on implementing the essential components of a successful transition strategy.
Building a Framework for Success
For firms considering this approach, several practical steps can help ensure a smooth transition:
- Define clear expectations and roles before finalizing any agreement;
- Structure compensation to align with both parties’ long-term objectives;
- Consider equity participation as a tool for maintaining engagement;
- Establish clear communication channels and decision-making processes; and
- Focus on preserving valuable client relationships while supporting firm growth.
While these foundational elements are crucial, executing them effectively in today’s market environment requires careful consideration and expertise.
Making the Right Move
With valuations at historic highs and the complexity of modern M&A transactions, the stakes have never been higher for RIA owners to consider a “sell and stay” arrangement. However, the difference between a successful transition and a problematic one often comes down to proper planning and expert guidance. Having guided numerous RIA owners through this process, I have found that the most successful transitions happen when owners approach the process with both clear objectives and realistic expectations about how their roles will evolve..
Author: Derek Bruton, Senior Managing Director of Gladstone Group, Inc.