Advisors: What Your Firm is Worth

As more advisors prepare for their own retirement and plan an exit strategy, having information on valuation is becoming more important. Indeed, at some point, you’ve probably wondered what your financial advisory business is worth.

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Comments (3)
Another consideration , I would think, would be whether the 'process' is survivable. In other words, there are a lot of advisory firms which are too dependent on the individuals and not on a demonstrated, documented, repeatable process which will survive the owners exiting stage store left. Another consideration perhaps is the scalability of the biz- where's the leverage factor in the business
Posted by Patrick M | Tuesday, December 17 2013 at 12:34PM ET
Great perspective but I'm still looking for ways to formulate a value incorporating those "three things". So if profitability is say $150,000 per year and growth is expected at 10% and sustainability is estimated to be 90%, what is a $1,000,000 revenue (with a mix of 80% fees and 20% commission) worth?
Posted by PAMELA R | Tuesday, December 17 2013 at 2:26PM ET
Three times fee-based gross or 6 to 7 times EBIT (earnings before interest and taxation). Or you can pay a "valuation" company big bucks to do the same math.
Posted by Dan L | Saturday, December 21 2013 at 8:24AM ET
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