AUM Carve-Out Strategy, A BIG DEAL

Part 2 - The Art of AUM Monetization and Acquisitions.

AUM Carve-Outs, amongst the most important strategies used by elite Advisors, when done right, this application can offer huge advantages. The real trick to a successful Carve-Out is to be in control of the transition and whether you are the buyer or seller, it is critical to have a good understanding of the motivations behind the carve-out.

For Chairman’s Council readers, some elements of a Carve-Out have been discussed, before in the issue titled “An Acquirer’s Dilemma or a Lucrative Fortune?”:

What’s a Carve-Out

Carve-Outs are often offered in different forms and with conditions. The most common carve-out opportunities come as a result of a few common scenarios:

• Sale of bottom quartile Assets - senior Advisors who segment their clients based on revenue and service levels, are often able to free up resources by selling lower performing and low revenue clients, i.e. the bottom quartile portion of their AUM that might not be as profitable to their practice.

• Unmanaged - as Advisors move to…