---
title: "RIA M&A Glossary | Investment Adviser Transaction Terms Defined"
description: "Definitions of the terms used in registered investment adviser mergers, acquisitions, and succession transactions: assignment, negative consent, valuation multiples, earnouts, and more."
canonical: "https://acquisitionstars.com/ria/glossary"
firm: "Acquisition Stars"
practice: "M&A and securities law"
office: "Novi, Michigan (serves clients nationwide)"
contact: "consult@acquisitionstars.com | 248-266-2790"
---

# RIA M&A Glossary

Reference Guide

Investment advisers operate under a regulatory vocabulary that does not appear in an ordinary business sale. This glossary defines the terms that come up in registered investment adviser mergers, acquisitions, and succession transactions, from Advisers Act assignment mechanics to valuation multiples to advisor transitions. Each entry links to the underlying legal guide where the concept is covered in full.

Looking for plain-language answers instead of definitions? See the [RIA Owner Guides](https://acquisitionstars.com/ria/guides).

## Regulatory Mechanics

The Investment Advisers Act concepts that determine whether a transaction requires client consent.

### Assignment (Investment Advisers Act)

A direct or indirect transfer of an advisory contract or a controlling block of the adviser's voting securities, generally triggered by a change of control.

### Negative Consent

A method of obtaining client consent to an assignment where continued acceptance of services, absent an objection, counts as implied consent.

### 25% Rebuttable Presumption of Control

Ownership or voting power of 25% or more of an adviser's voting securities is presumed to be control, a presumption that can be rebutted on the facts.

### Change of Control (RIA)

A transaction that transfers a controlling interest in an adviser, generally triggering assignment, consent, and Form ADV obligations.

## Valuation

How RIA transactions are priced, and the limits of any single metric.

### AUM Multiple

A valuation approach that applies a ratio to total assets under management rather than to revenue or earnings.

### Recurring Revenue Multiple

A valuation approach that applies a multiple to trailing twelve months of fee-based, recurring advisory revenue.

## Deal Structure

The registration, purchase-price, and recordkeeping mechanics built into an RIA transaction.

### Successor Adviser

The entity that continues advisory services to a client base after a merger, acquisition, or reorganization.

### Earnout (RIA M&A)

A purchase price mechanism where part of the consideration is contingent on post-closing revenue or AUM retention.

### Working Capital Adjustment

A closing-price reconciliation that measures actual working capital against an agreed target amount.

### Books and Records Transfer

The transfer of Rule 204-2 recordkeeping, including client agreements and compliance files, to the buyer or successor adviser.

## Transitions

The mechanics that apply when an advisor moves firms rather than an adviser changing ownership.

### Breakaway Advisor

An advisor who leaves a wirehouse or broker-dealer to launch or join an independent RIA, taking client relationships along.

### Garden Leave

A contractual notice period during which a departing advisor stays employed and covenant-bound but is removed from client-facing duties.

Working through the regulatory mechanics of an RIA transaction? [Request a consultation →](https://acquisitionstars.com/consultation)

## Related

### RIA M&A Attorney

Legal representation for RIA buyers and sellers, from letter of intent through closing.

### M&A Glossary

General mergers and acquisitions terminology, for deal terms outside the RIA-specific vocabulary above.

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Source: https://acquisitionstars.com/ria/glossary

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