Financial Advisor Success Podcast Ep 465

Making The Sell-Or-Keep Decision When You Hit A $260M AUM Wall

Guest: Todd Pisarczyk, Founder of Momentous Wealth Management
Host: Michael Kitces
Date: November 25, 2025

Episode Overview

This episode explores the pivotal moment many advisory firm owners face: whether to sell or keep their business after hitting a significant growth and complexity wall. Host Michael Kitces and guest Todd Pisarczyk dive into the reality of managing a fast-growing firm, analyzing both the financial and emotional components of the sell-or-keep conundrum. Todd shares his first-hand experience of crunching the numbers (down to his trademark spreadsheet), grappling with offers from acquirers, reflecting on family legacy and succession, and eventually rebuilding his firm’s operations and sense of purpose to break through the plateau.

Key Discussion Points & Insights

1. Hitting the Complexity Wall: Peak Earnings, Peak Unhappiness

• By 2022, Todd’s firm had reached $260M in AUM, 350+ clients, six staff, ~$1.2M revenue — a level identified by Kitces’s research (“Advisor Wellbeing study”) as commonly correlated with burnout and unhappy advisors ([02:57]-[07:43]).
• Quote (Todd, 06:31):
  “Peak earnings and peak unhappiness at the same time.”
• Todd describes losing flexibility and time, as every aspect of the business had to run through him or his longtime team members, causing him to feel trapped (“not a lot of freedom and flexibility”).

2. Flattering but Fraught: Navigating Acquisition Offers

• From 2019 onwards, Todd received multiple offers from both traditional RIAs and private equity. He worked with FP Transitions and other consultants to understand market terms ([09:01]-[16:52]).
• The offers often included a sizeable multiple (10–13x earnings) but required staying on as an advisor and meeting certain client retention/firm growth targets ([24:09]-[31:09]).
• Quote (Todd, 10:23):
  “You’re just buying goodwill. Yeah, that I’ve created with my clients.”

3. The Decision Matrix: Building “The Spreadsheet”

• Todd built a detailed spreadsheet to compare the real financial outcome of selling at a high multiple now vs. keeping the firm and selling internally at a lower multiple in the future ([21:53]-[36:42]).
• Key variables:
  • External sale: Upfront and contingent payments, taxes, post-sale salary, portfolio growth.
  • Internal succession: Keeping profits, projected firm growth, lower exit multiple (5x), but more time in the business and legacy value.
• Quote (Todd, 36:42): “The ‘keep and successor’ at 5x still actually adds up to more dollars than the sell at 12x today. That was a game changer for me.”

Notable Spreadsheet Observations ([38:24]-[42:16])

• Holding and growing the business—even with a much lower future sale multiple—often yields a superior financial outcome if the firm can sustain a healthy (10–15%) growth rate.
• The case to sell generally only makes sense if the buyer enables significantly higher growth than the seller could achieve alone.

4. Beyond the Math: Lifestyle, Succession, and Personal Fulfillment

• Family and legacy weighed heavily: Todd’s sons (and possibly his daughter) were entering the business and keen to succeed him, influencing his decision to stay ([16:52]-[21:53]).
• Realization: It wasn’t that he wanted out completely—it was that he needed to change how he worked and operated ([44:58]-[53:18]).
• Quote (Todd, 45:59): “Even at my least happy, I was still overall feeling…very happy and just constantly realizing how blessed we are to be in this industry.”

5. Firm Transformation: Systematization & Delegation

([53:18]-[67:29])

• Hired consultants (including Libby Greiwe/Efficient Advisor) to document and build processes, move workflows into Redtail CRM, and automate tasks.
• Transitioned long-held, founder-centered knowledge into scalable, teachable processes.
• Shifted personal role from “player” to “coach,” focusing on training and empowering the next generation—“like going from a player role to a coach role” ([45:59]-[54:58]).
• Quote (Todd, 53:18): “For the first time in a long time, I feel like I just…know what I’m doing and what we’re working towards… I just have this new excitement every day.”

6. Firm Today and Keys to Growth

• Momentous Wealth now above $400M AUM, $2.7M annual revenue, 9 staff (6 advisors), 450 client households ([67:29]-[68:57]).
• Team expansion, process-driven service, and a deep focus on delivering an exceptional client experience have accelerated client referrals and growth.
• Quote (Todd, 70:50): “Our strategy has not been flashy. It’s just—if we do a better job, then obviously clients are going to talk about us more.”

7. Lessons and Advice

• Process and Documentation: “I wish I would have started to build those processes earlier.” ([78:52])
• Proactive Time Management: Time-blocking (including adoption of surge meetings) and routine are critical for longevity and happiness ([81:19]-[84:42]).
  • Quote (Todd, 83:18):
    “If we have that control over our time, we all feel better about the way things are going.”
• Experience over Service: In today’s world, being truly referable means building a distinctive client experience, not just good service ([86:30]).
• Redefining Success: Evolution from “more clients, more AUM” to enabling the success of the next generation—“It’s building an environment that other people can be successful in and flourish” ([87:03]).

Notable Quotes & Moments (with Timestamps)

• “Peak earnings and peak unhappiness at the same time.”
  — Todd ([06:31])

• “You’re just buying goodwill…that I’ve created with my clients.”
  — Todd ([10:23])

• “We all talk about 1% fees, but…most of us actually charge something more like 70 to 80 basis points…[which] is somewhere between like $1.5 to $1.7 million of revenue [for $225M AUM].”
  — Michael ([02:57])

• “The ‘keep and successor’ at 5x still actually adds up to more dollars than the sell at 12x today.”
  — Todd ([36:42])

• “For the first time in a long time, I feel like I know what I’m doing and what we’re working towards—I just have this new excitement every day.”
  — Todd ([53:18])

• “Our strategy has not been flashy. It’s just—if we do a better job, then obviously clients are going to talk about us more.”
  — Todd ([70:50])

• On Success:
  “At this stage of my career, success is building an environment that other people can be successful in and other people can flourish in…It’s up to me to build that environment.”
  — Todd ([87:03])

Timestamps for Important Segments

• [02:57] — The “wellbeing” cliff: Realities of advisor unhappiness at $200M+ AUM
• [09:01] — Hitting growth/complexity wall: Revenue, clients, team size
• [15:45] — The acquisition offer process and consulting
• [21:53] — Spreadsheet approach to the sell/keep decision
• [31:09] — Typical offer structures and payments/taxes
• [36:42] — Financial outcome comparison: external sale vs. internal sale after growth
• [44:58] — Transitioning out of personal burnout (without selling)
• [53:18] — Newfound energy in the “coach” role; succession planning
• [60:49] — Building processes, moving to Redtail, team roles
• [67:39] — Present firm snapshot: staff, AUM, growth stats
• [81:19] — Practically managing time: Time blocking, surge meetings, routines
• [87:03] — Redefining success: From numbers to legacy

Takeaways

• Growing a firm to $200M, $300M, $400M AUM brings not just financial rewards, but a new level of operational and personal stress.
• The decision to sell or keep is both financial and emotional; spreadsheets matter, but so do lifestyle and legacy.
• Delegation, hiring, systemization, and a shift in self-identity (from “doer” to “coach”) are crucial for breaking through the wall.
• “Peak earnings” can coexist with “peak unhappiness”—but intentional change can recapture both profit and joy.
• Ultimately, success is less about AUM and more about enabling the next generation to thrive.

[Link to Todd’s “Sell or Keep” spreadsheet referenced in episode]
Find in the show notes for Ep 465 at Kitces.com/465

For more actionable insights and past episodes, visit Nerd’s Eye View by Kitces.