A Third of Your Exit Is Earned After You Sell

Choosing to retire and sell your book is a huge decision. It's the chance to realize the benefit of all the hard work you've done for yourself and your family, the chance to guarantee a smooth transition for your clients, and the end of a chapter where you improved so many lives with good-quality, well-timed financial advice.

That's real. It's the five years you gifted back to one client by helping them retire early. It's the cancer treatment that another was able to afford because you fought for them to get a policy without exclusions. It's the village of kids from your neighborhood who are attending a good college debt-free because you answered their parents' call when the markets dropped, and reminded them that disciplined, consistent compounding beats any attempt to time the market.

It's a commercial decision as much as it is an emotional one. How do I create a seamless transition for my valued clients, while ensuring that I am compensated appropriately for the quality of the business I have built?

This article is a playbook for using today's technology to create the best possible transition outcome for you, your buyer and your clients. It covers the best steps to take in preparation, during due diligence and after you agree to sell.

How a buyer values your book

In any sale of an advice practice, it's the buyer's job to collapse the quality of your relationships into one number: your EBITDA multiple. This multiple is a function of the stickiness of your book, and the buyer's ability to grow revenue from it. The median RIA deal in 2024 was priced at 11.0x adjusted EBITDA.¹

Retention risk determines where your firm lands in that range: will your clients, and their revenue, still be there once you've gone? Retention is the crown jewel of the RIA industry, with 97% of clients staying with their firm year to year.² Buyers look for strong recurring revenue and a "transferable client experience" to evaluate retention risk.¹

The complication is that a transaction is exactly the moment where client relationships are most at risk. The trust, and everything you know about each client, lives with you. Firms that sold equity in 2023 lost clients at almost triple the rate of firms with no transaction that year: 8.4% attrition compared to 3.2%³ Buyers know this, and they protect themselves through the structure of the deal. In the average 2024 deal, only 66% of the price was paid at closing. The other third came later: 10% as retention payments and 24% as contingent consideration, based on business performance post-sale.¹ Richard Chen explains how these clauses work in detail in his Kitces article.⁴

Advice technology can help you avoid a retention risk discount in two main ways. The first is creating a transferable client experience, by helping you hand over relationships smoothly. The second is showing a buyer strong data quality, which raises their confidence in a smooth transition, lowers their perceived key-person risk and supports a stronger multiple.

Both come down to the same thing: a queryable client book that transfers your wealth of knowledge and deep relationships to a new advisor, seamlessly and in a way that lasts. Your successor needs to know what you know, at the moment they need it, years after you've retired.

Stage 1. Before you sell: build the asset

Two to five years out, the most valuable thing you can do is get what you know out of your head and into one place. That means picking a tool that connects every piece of information you have about each client: their custodied assets, their meetings, their emails and the files about them.

Do it while the choice is still yours. The day you sign, you stop choosing your tools. The buyer has a CRM, a planning stack and a compliance team, and you'll be on all three within months. Building a queryable book after that is far harder, because you'll be working inside their technology, not yours.

A queryable book doesn't replace a written succession plan, and only 42% of RIAs have one.⁵ A clear plan for what happens to your clients matters too. The data just makes that plan much easier to carry out.

Start now. Every meeting, decision and preference you capture today is one less thing your clients will have to repeat to a stranger. In tools like Marloo, this is easy. Our ten-step setup guide takes you from importing your clients to connecting your custodian, syncing years of client email and recording every meeting, in minutes.

Stage 2. Due diligence: show the asset

Due diligence is where a buyer takes a deeper look: they want to know who your clients are, what they hold, how often you see them and how likely they are to stay. Most sellers answer with spreadsheets pulled together over weeks.

With a queryable book, you answer in minutes, and you can show your work:

• Which households haven't we met in the last 12 months?
• Which clients have already brought their children or heirs into the conversation?
• What has each of our largest households told us about their plans for the next five years?

Due diligence is often the most painful stretch of a sale: weeks of document requests, exports and follow-up questions. A queryable book takes most of that pain away. Whatever data cut the acquirer asks for, you can pull it in a single message. Hours of painful work turn into a five-minute job.

Pitch the data behind your book as a durable asset, an intrinsic part of what they're buying. Don't just hand over a client list. Show the buyer that every relationship comes with its history, so their advisors can pick it up on day one. That's the "transferable client experience" buyers pay a premium for, and it answers their key-person concern before they raise it.¹

Stage 3. After the sale: hand over the relationships

The deal is signed. The remainder of your payout now depends on retention payments, paid based on AUM retained one to three years after closing, and a contingent earnout, based on growth. The first few months are when clients make up their minds about whether they'll stay: it's a critical period that must be handled carefully.

A smooth transition starts with you. Tell your clients about the transition before they hear it from anyone else: why you're making the move, who's taking over and what stays the same.

The next step is bringing the new advisor or firm up to speed. Done the old way, it's a string of conversations squeezed into whatever time the new advisor can spare, where you try to boil hundreds of 20-year relationships down to a few sentences. Most of what made those relationships work gets lost.

There is now a better way. You can securely transfer the information you have stored in Marloo to the new advisor, passing on everything that has let you look after that family's financial future to its next caretaker to handle with the same care. This gives them access to a lifetime of context on day one, which Marloo delivers before they even ask.

As a result, they know about Eliza's low-risk appetite and preference for US Treasuries when they meet her for the first time. They know that Greg and Joanne passionately love the Patriots and that any conversation that starts with Sunday's game will end well. They know that finances are a sensitive topic for Bob, so they tread carefully. This completely transforms the feeling of being introduced to a new firm for your client. Yes, there's a new logo, but the same deep care and understanding you've shown them over your career remains unchanged.

Stage 4. The earnout: grow the book

Earnout clauses focused on revenue growth are a common feature of RIA exits, and 10 to 15% compound annual growth targets are standard.⁴ Over a three-year earnout, that's an obligation to grow revenue by 33 to 52%, with a quarter of your exit riding on it. You can do this by winning new clients or by unlocking new revenue from the ones you have.

If you're doing this by hand, finding growth in your book is a hard slog that relies on your memory and your patience for reading through countless client files. With a tool that knows everything about your client book, it's a question away:

• Which clients may be approaching a major planning event? That's a new planning engagement.
• Which households have assets held away? That's a consolidation conversation.
• Which clients haven't had a particular planning conversation in several years? That's a reason to call, and a plan brought up to date.
• Which relationships might benefit from a deeper estate planning discussion? That's how you keep the next generation.

One meeting does three jobs. It introduces your client to the new firm, makes sure their plan reflects what's changed since you last spoke, and opens a new AUM opportunity.

Corbin's team did exactly this. With a single prompt, he asked Marloo to go through their last 25 meetings and find the opportunities they'd missed: assets held at other institutions, and conversations that never turned into action. Acting on that list, they brought in $4.5M of new AUM in two months.

Do right by them

Your clients trusted you with their retirement, their health and their kids' futures. Selling well means they don't have to start that trust over with a stranger, and it means you're paid for the business you actually built.

If you're two to five years from a sale, start now. Look for an AI partner that can help you create the best possible exit outcome for everyone involved. If you'd like to explore that kind of partnership, call me at (516) 206-6874 or email liam@gomarloo.com.

Sources

1. Advisor Growth Strategies, RIA DealRoom 2025 (with BlackRock). PDF
2. Schwab RIA Benchmarking Study, 2026. advisorservices.schwab.com
3. The Ensemble Practice, via Blueleaf. blueleaf.com
4. Richard Chen, Kitces. kitces.com
5. DeVoe & Company, via PlanAdviser. planadviser.com