Private Advisor Group CFO Adam Schorr on why buyers and sellers price the same practice differently

Two people can study the same advisory practice and write down numbers that do not meet. Adam Schorr, chief financial officer of Private Advisor Group, told Wealth Solutions Report the reason is narrower than the spread suggests: the two sides are pricing different things. Sellers count the trust built over decades, the client relationships themselves and the revenue those relationships generate, and some add a premium for specialized expertise or services they believe the market will pay for.

Buyers work from a different list: client retention, transition risk, operational consistency and whether the business can thrive without its founder, plus client demographics and succession risk — which is to say the acquirer is underwriting the next decade of the book rather than the last one. The two lists collide in a single place, and it is the place that decides the deal. Where the founder is the primary reason clients stay, the strength the seller is proudest of registers with the buyer as transfer risk: the one asset in the practice that cannot be sold, because it leaves when the seller does.

The surprise, Schorr said, usually arrives twice — in the number and in the reasoning behind it. Advisors benchmark themselves against headline transactions without allowing for how much deal structures and market conditions vary from one to the next. His account of seller motivation is less mercenary than the market usually assumes: for most advisors, the objective is not the largest possible check but the right successor, fair value and confidence that clients will be well cared for. Buyers evaluate a practice through a financial and operational lens; founders are pricing something they spent a lifetime building, and that is the reason the two sides so often talk past each other at the table.

Of the variables Schorr listed — transferability, retention through transition, organic growth, process maturity, founder dependency — exactly one sits within a seller's reach in the year before a sale. Transferability, he said, is addressed mainly through stronger process and operational consistency, and buyers gain confidence when key workflows are documented and repeatable, because a documented practice reads less like a founder's personal network and more like a business that will still be standing after the closing.

Founder dependency sits at the opposite end of the calendar, and Schorr's position, as framed in the interview, is that reducing it requires years of preparation, which puts it out of reach for an owner who starts thinking about a sale in the season he wants to sell. The two variables therefore run on different clocks, and only one of them can be repaired in the final year. An advisor who wants optionality in three years is choosing, whether or not it feels like a choice, between working on the part that is quick and the part that matters more.

For the acquirer, the questions underneath retention, transition risk and operational consistency resolve into the one that decides whether a consolidation multiple holds: who keeps the client once the founder steps back. Schorr's buyer checklist is that argument viewed from the other side of the table, and it suggests the purchase price buys the book while the multiple is effectively paid for the retention. His vantage point is that of a platform rather than a single practice — Private Advisor Group counts 170,206 accounts, $57.7 billion in regulatory assets and 930 employees as of early October, per WAD's records.

Sellers who anchor on headline transactions should be clear about what those numbers contain. Carlyle's $2.8 billion agreement for MAI Capital Management prices the target's AUM at roughly 5.5 cents on the dollar, a transaction this publication has argued re-prices what scaled owners can expect at the table. That figure reflects one book, one structure and one set of retention assumptions, and Schorr's point is that the assumptions are where a smaller practice most often diverges from the comp it is holding up.

The direction of the market is not what is producing the gap: deal counts fell 9% while seller assets climbed 88%, a split that says buyers are still paying up for books while growing more particular about which ones they buy. That is the same message Schorr delivers in operational language: diligence is asking who the clients belong to after the closing, and the answer needs to exist in writing well before anyone signs.

For a founder weighing an internal successor against an outside buyer, the split Schorr describes sets the sequence of work more than it sets the price: document the workflows first, because that is the part that can be done this year; start dismantling the founder's centrality now, because that is the part measured in years and no acquirer's diligence will do it on the seller's behalf. The question an owner can answer today is a plain one: if the founder stopped calling clients tomorrow, which relationships would still be there? The practices that can answer it on paper are the ones that get to negotiate over the multiple rather than over whether the book transfers at all.