Wealth Advisors & RIAs Deals: Working Capital Adjustments Done Right
When the deal is wealth advisors and RIAs and the question is Working Capital Adjustments, the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.
Wealth Advisors & RIAs deals in the lower middle market run a specific playbook. Working Capital Adjustments is where the structure either holds or starts to leak.
The typical wealth advisors and RIAs platform sits at $10M to $180M EV with EBITDA in the $3M to $25M range. The thesis runs on RIA aggregation or wealth platform roll-up. Client consent process is the longest pole. Start it the day after the LOI signs.
How Working Capital Adjustments actually gets structured.
Set the peg based on a trailing 12-month average, normalized for seasonality.
Define each line item in the schedule, especially deferred revenue and accrued vacation.
Cap the dispute resolution timeline at 30 days post-close.
Build a true-up payment mechanism funded out of escrow.
In wealth advisors and RIAs, layer in negative consent process timed with regulators as part of the Working Capital Adjustments workstream.
Using an unadjusted average that ignores seasonality. You pay twice for the same cash.
"Working capital is where deals are won or re-traded after LOI. Read every line of the schedule."Jason Powell · Working Capital Adjustments
The deal is one thing. The capital that opens up after close is another.
Capital after close is where the IRR actually gets made. The right introductions at month nine through month thirty are where this practice works as hard as it does at the LOI.
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An LOI on the desk, a wealth advisors and RIAs target, and a Working Capital Adjustments question worth a real conversation.
Twenty minutes of practitioner-grade input from a securities attorney whose first move is to read the deal, not the engagement letter.