Valuation Multiples in a High-Interest Environment

By Intersection Advisory · M&A Trends

Published: February 25, 2026

Category: M&A Trends

The M&A market for financial advisory practices has seen significant shifts as interest rates have stabilized at higher levels. Understanding how this environment affects valuations is critical for both buyers and sellers.

Current Market Dynamics

Deal flow in the wealth management space remains robust, though the composition of transactions has evolved. Strategic buyers continue to pursue high-quality practices, while private equity interest has become more selective.

Valuation Adjustments

The days of stratospheric multiples have given way to more disciplined pricing. Current valuations reflect a more nuanced assessment of:

- **Recurring revenue quality**: Fee-based AUM commands premium multiples

- **Client demographics**: Practices with younger, accumulator clients are valued higher

- **Organic growth rates**: Firms demonstrating consistent organic growth outperform

Financing Considerations

Higher interest rates have impacted deal structures. Sellers are seeing more creative arrangements including earnouts, seller financing, and equity rollovers as buyers seek to optimize their capital structures.

Strategic Implications

For sellers, now is the time to focus on the fundamentals that drive value. For buyers, this environment presents opportunities to acquire quality practices at more rational valuations.

At Intersection Advisory, we help both buyers and sellers understand their position at this market crossroads—ensuring every transaction maximizes long-term value.