|
Succession Planning: Buy/Sell Practice

Any ideas on the variables of pricing a book? Seems to be all over the place. Just looking for something fair to both parties.

like
Arrow Icon
Posting as :
works at

Commission revenue has been trending down the last few years. It used to be consistent around 1x, but last year the average multiple from deals was 0.88x. Recurring revenue you are right on - selling between 2-3.5x depending the revenue source (third-party managed assets and fees being valued the highest), age of the clients, expenses that need to be assumed, and strength of the client relationship. Those are just a few indicators, but most of the big ones. The other big contributor to discounts and premiums on the purchase price are related to how the deal is structured and financed. The more contingencies that are built into the deal, that can adjust the price post closing, the higher the value due to shifting risk away from the buyer to the seller

like
Arrow Icon

Many factors go into it, but I’d say 1-1.5x on commission accts and 2.5-3x on fee if you are going to be competitive

like
Arrow Icon

I agree. Have done a couple deals and those seem to be the mark.

like
Arrow Icon

FP transitions has a great book on succession planning that includes examples and rationales for valuing a practice. You can buy it directly from their website.

Arrow Icon

Those strategies FP talks about were great 10 to 15 years ago before anyone really knew much about buying and selling, but succession strategies and how to value a book have moved way beyond what those books talk about. Still probably appropriate for smaller books of business (sub $500k GDC). Best to google the subject at this point and you’ll find a lot of more contemporary and reliable resources and data.

like
Arrow Icon

Additional Posts

SM1 non-MBA in Strat IT Advisory in Toronto. Grew up at EY starting as S1 over 11 years ago at 40k base. Now at 126k base feeling severely underpaid. How much more could I get at B4 or industry or EY?

like
Arrow Icon

Anyones parents absolutely glued to CNN/MSNBC 24/7? Ever since covid happened I realized that 2% of it is actual news/journalism and the rest of the show is "let's pick apart trump" hour. Ironically my parents make fun of Fox News addicts

likesmarthelpful
Arrow Icon

How do you roll with the punches? When I make even a small mistake that anyone could make my mind immediately goes to "well that's that, I'm getting fired"

Arrow Icon

what is the mbb recruiting timeline looking like for interns and full time (undergrad)?

like
Arrow Icon

Any Accenture execs out there? I'm wondering about your views on the culture at ACN at the exec level. Got a query from a recruiter recently and I am curious.

like
Arrow Icon

Well I just got laid off from the industry job I started a few months ago and hated. The fact that I’m not even remotely sad about it shows how toxic and horrible the experience was. Good thing is I already have interviews lined up and have been applying to jobs way more in the past week so I’m not even phased.

like
Arrow Icon

Does Bain have a hiring freeze in North America ? (Experienced hired roles)

like
Arrow Icon

What do you consider micromanaging? And do you believe that “because the client wants it” is a valid reason? I’m trying to get a feel for what’s “normal” with our remote work situation. By micromanage, I mean things like: letting your team lead and or client know you’re online every day and letting them know when you’ll finish working for the day, letting your team lead know what you work on in detail every day, and reporting any breaks you’ve taken throughout the day

like
Arrow Icon

Would you switch from EY TAS to Deloitte S&O on a lateral? Recruitment says Deloitte S&O is more comparable to MBB so have a better brand despite same level...

like
Arrow Icon

For those thinking about buying airlines, Warren Buffet just sold some massive stakes in Delta and Southwest for significant losses. The ultimate value/buy and hold investor selling out is a sign.

likehelpful
Arrow Icon

Hey everyone, anyone here work in D&I for Lockheed Martin?

Arrow Icon

What insurance firms at EY drug test?

like
Arrow Icon

Raising risks (that are quickly being issues) without project leadership taking notice...feels like yelling 'ICEBURG' on a ship and nobody changing course...time to jump in a lifeboat?

like
Arrow Icon

Could I just take a 1-2 week vacation while on the bench without telling anyone as long as I respond to emails and get my shit done when need be?

like
Arrow Icon

Just booked hotels in Hawaii (Maui) for a family trip early 2022. Do you think by late Jan/early Feb next year, we’ll be able to travel relatively safely and w/o strict quarantine rules? My parents will have to travel from Asia so it will be transpacific flight

like
Arrow Icon

How long after getting an h1b does the company file your green card?

like
Arrow Icon

Never worked in healthcare but this ad is still very targeted.

Post Photo
likefunny
Arrow Icon

Trying not to psych myself out. I tested negative for COVID as of Saturday afternoon but today I don’t feel myself. Not sure if it’s paranoia. I’m taking vitamin C on the hour

like
Arrow Icon

When looking for small after hours gigs for extra bucks where do you go?

like
Arrow Icon

How accurate is Glassdoor when it comes to Deloitte Senior Manager salary? How are signing bonuses at that level?

like
Arrow Icon

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
That was just a preview…
Sign Up to see all discussions
  • Discover what’s it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the Fishbowl app

Get realtime notifications and see
what's happening in your industry
from the palm of your hand.

Please enter a valid number