Pay takes two-thirds of advisory revenue

What do advisers actually charge?

Firmex, which sells data rooms, surveyed 456 middle-market professionals in December 2024 and January 2025, and 72% worked at firms of 20 people or fewer. The most common effective success fee was 4.8% on $5 million, 3.4% on $20 million, 2.0% on $100 million and 1.9% on $150 million. That is about $240,000, $680,000, $2.0 million and $2.85 million (our calculation).

The classic Lehman scale gives only 1.5% on $20 million. The "Double Lehman" scale gives 3.0%, much closer to what advisers report (our calculation). The choice of formula matters less than it seems: Firmex found it had very little effect on the effective fee. Location matters more. European fees ran 1.1 points below North America on small deals and 0.4 points on the largest.

Public deals sit far lower. In US public acquisitions from 1996 to 2005, bidder advisers earned a mean fee of 0.637% and a median of 0.467%.

Work fees are small but common. In the Firmex survey, 16% charged none (12% in Europe, 19% in North America), and the usual monthly fee was $5,000 to $10,000. Axial's 2026 survey of 331 advisers suggests a shift: nearly a third now charge nothing upfront. The sources differ on crediting: Firmex reports 57% deduct work fees from the success fee, while an adviser quoted by Axial cites 77%.

What does a banker produce, and why does the benchmark not travel?

Listed independents are not boutiques. Perella Weinberg, the smallest US-listed firm here, has 736 people, more than 70 times a firm of ten. Evercore has about 2,570. Their clients, deal sizes and brands are different.

Revenue per person ran from $0.93 million at Houlihan Lokey to $1.79 million in Evercore's Investment Banking & Equities segment (our calculation). Per senior banker the range was $7.4 million to $19.1 million, though titles differ by firm. The gap mostly reflects fee size. Moelis earned about $4.2 million per client from 363 clients. Houlihan Lokey's Corporate Finance segment earned about $2.7 million per closed transaction. One listed European adviser earned about €0.93 million per transaction (our calculations).

Where does the money go?

Pay took 64.3% to 71.7% of revenue, other costs 12.4% to 22.3%, and operating margin was 6.4% to 20.5%. The important point is timing. Pay is variable, but not fully. In 2023 the pay ratio hit 83.6% at Moelis and 77.4% at Lazard, and 93.9% at Perella Weinberg, whose figure includes equity awards. Houlihan Lokey's revenue fell 20.3% in one year with little change in its ratio. PJT's revenue rose every year from 2021 to 2025. The filings do not prove why these firms held up better, but both earn fees from more than classic M&A.

What do real boutique accounts show?

Four UK LLPs file full accounts we could read. All figures are for the year to 31 March 2025.

Our calculations from the filed accounts. The pool includes partner pay, so it is not an operating margin.

Revenue swings are sharp: one firm's turnover fell by more than a third in a year and its partner pool by more than two-fifths. Other costs also do not shrink in line with revenue. The smallest firm, the closest to a firm of ten, spent 35.7% of turnover on them. One firm is not a trend, but fixed costs weigh most when revenue is low.

How real is the succession wave?

Canada shows why intentions need care. CFIB's 2026 survey of 1,731 owners found 63% plan to leave within ten years, with more than C$2 trillion in assets at stake. Statistics Canada found 20.3% of businesses intend to sell or transfer within ten years, 42.6% do not, and 37.1% do not know. Over five years, CFIB's figures sum to 43%, while BDC found 19% very likely to exit. CFIB warns its sample may lean toward owners interested in the topic, and its own series moved from 72% (2018) to 76% (2022) to 63% (2026). BDC's C$300 billion is revenue, not sale value. Not every exit is a mandate either: 54% of CFIB's owners plan a sale to an unrelated buyer and 13% expect to close.

The UK has the best hard evidence. HMRC counts people claiming Business Asset Disposal Relief. Claimants fell from 48,000 in 2021 to 2022 to 42,000 in 2023 to 2024, then reached 61,000 in 2024 to 2025 on £18.5 billion of gains. HMRC says the announced rate rises, from 10% to 14% and then 18%, gave taxpayers a chance to bring disposals forward. That points to tax timing more than demographics. Advisers do report age as the main driver: Dealsuite's survey of 106 UK and Irish firms attributes 41% of transactions to age and no successor, though the average seller's age has fallen from 59 to 56 over a decade. We could not verify an official UK figure for the share of owners near retirement.

Belgium and the EU have thinner data. We found no verified national Belgian figure. A Flemish government study of 586 firms led by people over 55 found 56.6% expect the leader to step down within five years, but only 39.3% expect ownership to pass in that time. Some 47.7% expect an outside sale and 45.6% a family transfer. Vlerick's 2026 monitor of 158 specialists calls retirement by far the main reason for selling. The widely repeated EU figure of 450,000 transfers a year comes from a 2011 study. In June 2026 the Commission issued a new Recommendation, citing almost 8.9 million self-employed people aged 55 or over in 2024.

Where do mandates come from?

Public data is thin. We found no verified survey of mandate sources for UK, Canadian or Belgian advisers. What exists points one way.

Mandates are won one at a time. Evercore, Moelis and PJT each say an engagement is typically "separately solicited, awarded and negotiated". Yet clients do return. In a study of acquirers from 1979 to 2011, the chance of keeping the same adviser was 49%, which the authors call "a good deal of stickiness". Boutiques win on skill as well as size: about a quarter of merging firms hired one from 1995 to 2006, more often on complex deals and less often as deals grew.

Owners start with people they already trust. Among Canadian owners with a succession plan, 41% used an accountant, 21% a lawyer and 17% a personal financial adviser, while 38% used no one. CFIB's 12 answer options include no M&A adviser category. In Flanders, talks with fellow entrepreneurs and advice from accountants lead. Statistics Canada found 38.4% of intending sellers expect to use professional support such as a broker. Houlihan Lokey describes accounting and professional firms as "potential referral sources".

A Pepperdine survey of 43 bankers, mainly in the US, found 66% of engagements transacted, with a median 32% not closing, and valuation gaps the most cited cause.

What does this mean for an independent firm?

• Check your scale against the survey, not the rule of thumb. A classic Lehman letter sits near half the market between $10 million and $50 million. Use European data if you work in Europe.
• Set fixed costs for the bad year. Listed firms with far more cushion saw pay ratios reach 84%. Know your break-even revenue before a slow year.
• Treat work fees as risk cover. If one engagement in three does not close, success fees alone leave that risk with the firm.
• Put origination time where owners go first. The evidence favours accountants, lawyers and past clients.
• Plan for a steady flow, not a flood. Retirement drives many sales, but stated plans are not sales, and UK tax changes pulled some deals forward.
• Compare like with like. Use listed firms for the shape of the business, and small-firm filings for the numbers.