On this week’s episode of Quantum Growth for Financial Advisors, we shift gears towards the accounting firm industry and delve into a concept that is one of the core focuses of Kuttin Consulting Group – accounting firm partnerships.  Today, we take it a step further and talk about accounting firm acquisitions as it relates to wealth management and how we are starting to see financial advisors shift their focus towards the accounting industry.
On this episode, we welcome Todd Steinberg and Shannon Hay to the show.  Jon, Todd and Shannon discuss the evolving landscape of CPA firm acquisitions and the integration of wealth management services, highlighting a significant shift in the industry following the EisnerAmpner deal that facilitated private equity involvement in the accounting space.
Todd Steinberg of Thrive talks about his experience in the space and makes an observation that wealth advisors are increasingly interested in acquiring CPA firms to offer a comprehensive service package to clients. Shannon Hay adds that the financing landscape for these acquisitions is becoming more and more competitive, with high demand limiting investment advisors’ capacity to purchase firms. The trend seems to be moving towards a one-stop-shop experience for clients seeking both accounting and wealth management services.
Jon, Todd and Shannon also address changes in deal structures, with a notable shift from earn-out arrangements to transactions emphasizing cash, often requiring 70-80% cash upfront. Sellers are now expected to contribute a smaller equity component, which reflects a shift towards a more competitive market dynamic.
The speakers discussed the importance of a 1.3x debt service coverage ratio for SBA loan funding, emphasizing the need for sufficient income to support debt obligations.
Todd outlined essential steps for financial advisors looking to acquire CPA firms, including securing pre-qualification for funding and building relationships with brokers. The podcast concludes with a focus on the industry’s move towards an integrated service model, aligning with modern consumer expectations for convenience and efficiency in financial services.
Jon Kuttin, Todd Steinberg and Shannon Hay Discuss:

* Trends in CPA Firm Acquisitions and Integration with Wealth Management
* The Importance of Pre-Qualification for Financial Advisors Looking to Acquire CPA Firms
* Current Trends in CPA Firm Acquisitions and Deal Structures
* Integration of Wealth Management Services into CPA firms
* Private Equity Trends in Accounting Deals
* The Competitive Landscape of the Accounting Industry and its Impact on Valuations
* Strategies for Financial Advisors in Acquiring Accounting Firms
* Debt Service Coverage and SBA Loan Structuring
* Strategies for Financial Advisors in Acquisitions

Links:

* Thrive Financial Group
* Thrive Financial Group – Todd Steinberg
* United Midwest Savings Bank
* United Midwest Savings Bank – Shannon Hay

Connect with Todd Steinberg and Shannon Hay:

* Todd Steinberg – LinkedIn
* todd@thrivefinancialgrp.com
* Shannon Hay – LinkedIn
* shay@umwsb.com

Connect with Kuttin Consulting Group:

* (855) 722-9393
* kuttinconsultinggroup.com
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