Related Posts
Enthusiast
Additional Posts in Financial Advisors
Who has the most exciting plans for the weekend?
Anyone in the Houston area?
So the fiduciary rule got tossed yesterday
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
1-1.5x commission based business, 2-2.5x recurring revenue. I've facilitated 5 deals this year and depending on you book, you'll come up with a range. If you've got all 40 year old business owners vs. all 70+ retirees sucking assets down you come up with a different number. Best practice is to hire FPTransitions to get a valuation done. That sets a share price and allows suitors to have assurances as to value.
Would be interested to know this myself
Good advice, FP has the process down.
@Professional Investors Network; @AdvancedPracticeAdvisors ... at what cost... FPtransitions??
For those in the know, who’s selling?
Google succession link. They email you practices for sale in your area. The emails are free, if you want to really investigate a practice they have a pay service model.
Thoughts on paying for Succession Link? Still seems to be mostly buyers and I'm debating its value as a result.
No. Just putting sellers with buyers in our group. By helping both parties we retain the assets and production and provide clients with continuity. Nobody loses and that's good business. So far we've not done deals outside the group but we're considering marketing to outside Advisors. If you have the right compensation structures in place at your firm you can structure deals that are really attractive to sellers and buyers. Sellers want income, younger buyers want low or no down payments. The key is in your ability to get fee compensation to unregistered (retired, CPAs, lawyers) persons. If your fee sharing arrangements allow for say, 75% of fees to be paid to the unregistered, it gives you a lot of flexibility in structuring deals. Most firms are at 50% though. The lower that number, the more difficult it becomes to get deals done.
Five grand. Ish. They have several different ways to be engaged. It's worth the fee because they have the purchase and sale documents that create a legal black box for both parties. Seller gets paid more if the buyer builds the business during earn out, or paid less if accounts leave or markets decline. This keeps the seller keenly interested in sticking around long enough to keep retention high for the buyer and helping find new money. A valuation by a CPA firm would work too ($3-5,000) but none of the documents get done.
Yeah... Succession Link's value... not sure. Kind of random. The five deals I've facilitated this year were all done between advisors in our 85 person production group. It's much easier if both parties are at the same firm. Also many firms have funding available to get the deal done.
But the industry is filled with older advisors. and cross firm deals are common also. The trick is finding quality younger guys with some shelf life and the drive to build their practice.
@prof. Invest.network. are you acting as a broker for the transactions? Are you only able to see what/who is leaving bus. Or in market to sell within your own bd/ria firm, or outside as well?