What fees can business owners expect from M&A advisory firms? 



Getting a data-driven read on many aspects of the elusive lower middle market is hard, especially on a topic as sensitive as M&A advisory fees.

Nearly every M&A advisor structures their fees as some combination of a retainer and success fee. The split between retainer and success fee and how both are structured significantly impact an M&A advisor’s incentives. Understanding each can help you decide how to negotiate fees as you work with advisors.



Earlier this year, Axial partnered with Firmex and Divestopedia on the Annual M&A Fee Guide, the authoritative source on M&A fees for sell-side engagements in the middle market. The data was gathered from more than 250 M&A advisory firms. 

The most common answers:

Retainer Fees

• Retainer Fees: 44% are fixed, one-time fees; 31% are monthly 
• Most Common Monthly Retainer Size: 49% of advisors said $5K – $10K per month
• Retainer Fees Deductions from Success Fees: in 2022, 56% of advisors said they deduct their retainer fees from the success fee.

Success Fees

The Most Common Success Fee Structure:

Understanding Banking Fees

M&A advisors, like everyone else, are driven by incentives.

In turn, exit fees aim to align incentives between the business owner and the M&A advisor. Ensuring that an advisor will push for the right outcome for your company comes down to getting the fee and engagement structure right.

If the fee arrangement isn’t well-structured, advisors can become conflicted. A lackluster fee arrangement can incentivize an advisor to sell the company for less money more quickly. That way, they can move on to the next deal and their following fee. 

As a business owner, you’ll have to decide whether you want a deal closed faster or for more money. The choice can significantly impact which banker to use and how to structure the fees.

Ensuring the incentives are aligned with your expectations will help drive the deal to the correct result.

Chapman Associates Fee Structure

Our fees are set to maximize the sales price to the seller. We do not charge upfront or monthly retainer fees. Since we rely solely on success fees, we do not take on any project unless we know we can successfully complete the transaction with the best possible outcome. 

Our fee structure is competitive and aligns with the survey results as follows: 6% of the first $5M, 4% of the next $5M, and 2% of amounts over $10M. On a $20M sale that equates to 3.5%; and on a $50m sale, 2.6%.

ABOUT US

Whether you want to sell or buy a business, Chapman Associates provides a personalized service based on our sixty-nine years of successful M&A closings and our relationships with more than 9,600 registered buyers.

Chapman is one of the most respected middle-market M&A firms in the country. What makes Chapman different from the competition?



• We make a market for our clients.

• We do not charge any up-front fees.

• Our fees are based on successfully completed transactions.

• We devote senior-level attention to every M&A transaction.

• We do not delegate work to junior staff.

• We help clients set realistic goals and work hard to exceed them.

• We conduct in-depth research and rigorous analysis.

• We prepare all necessary offering materials.

• We have ten offices nationwide to serve our clients.

Mark Mroczkowski, CPA, CM&AA

Managing Director 

mark@chapman-usa.com

www.chapman-usa.com

407.580.5317