Financial advisor marketing book of business valuation

Valuation of an investment advisors book of accounts. Practice acquisition acquiring a retiring advisors practice is an. The initial valuation of an advisors book of business is provided upon registration. Throughout the text, proven marketing approaches are combined with realworld insights from these successful advisors. Under these circumstances, the dealer arranges for a transfer of the clients for a fee paid by the buying advisor to the departing advisor, but the dealer continues to own the book of business.

This book has a ton of helpful tips and metaphors to help you break down complex topics for your clients. Heres what you need to know to set your company at the right price. The simplest and most common approach to valuing a financial advisory firm is typically two times last year s gross revenue. Its easily one of the best books for financial advisors. Book of business is an industry term that refers to a salespersons or professionals list of accounts or clients. One of the most difficult aspects of any financial practice sale is reaching an appropriate valuation.

Simply multiply the practices trailing 12 months revenue times a multiple. Marketing for financial advisors opens the door to an entirely new perspective on your business. An orderly transition of a retiring investment advisor s book of accounts to a new one would help keep loyal clients and a steady stream of revenue. Welcome back for the eighth episode of the financial advisor success podcast.

Often, buyers and sellers go into negotiations with values in mind. Our comprehensive valuation report uses the industrys largest comparable sales database of financial service practices to deliver a neutral, accurate, and marketbased estimate of value. The advisor who takes over the book of business pays based on an estimate of the anticipated cash flow. If an advisor is the primary relationship manager with the clients in the firm, then the. Reviewing the fp transitions comprehensive valuation report. Financial advisers are most commonly associated with books of business, but certain other producers might have this terminology applied to their own client lists as well, including insurance sales agents, private bankers, investment bankers, and financial planners. Business valuation is the process of determining the economic value of a business or company. This valuation is used by advisors who are planning to acquire or sell a 100% business interest in an assetbased sale.

David is not a financial advisor himself, but over the past 20 years his business, fp transitions, has facilitated the sale of nearly 1,500 advisory firms, and valued almost 9,000 of them. I always knew that stories are some of the most powerful marketing tools we have, but i always struggled using them to relate to financial services. Financial advisor magazine created exclusively for advisors by highly experienced editorial and publishing teams. The selling advisor always thinks their practice is worth a lot more than it is and valuation companies seem to agree. Business analysis and valuation using financial statements. Valuation trends and methods for financial planning firms. But leave the excess cash in the business for investment. In the context of advisory firms, the leading kelley blue book solution for valuation is fp transitions and its comprehensive valuation report cvr, which uses their comparables database of more than 1,500 advisory firms bought and sold in the past 20 years to estimate the value, after making reasonable adjustments for transition risk, cash flow quality, market demand, and the payment terms of the transaction itself. You will begin to view yourself as an entrepreneur and understand that an investment in marketing is an investment in the future.

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