Industry Update: Understanding the Real Value of a Financial Advisor’s Business

A conversation on valuation with special guest Louis Diamond

Advisors who are employees of brokerage firms, particularly the wirehouses, face some tough questions as they think about how they want to retire from the businesses they’ve built.

Is their current firm the right place at which to leave their legacy?

Is it right for their clients, their team and their next gen inheritors?

Is it possible that there’s a better opportunity for all stakeholders?

And is making a move relatively late in the game worth the hassle?

Diamond Consultants’ resident expert on M&A, Louis Diamond, joins the show to take a deeper dive into a topic that Mindy Diamond covered in a recent article for Forbes, “What’s the Real Value of a Financial Advisor’s Business.”

Together they discuss:

The value of sunset or retire-in-place programs—and whether it’s the right path for both the senior advisor and his successor.
What senior advisors and next gen inheritors need to consider when presented with their firm’s retirement package—and how successors will be agreeing to “buy” a business they may never own.
Whether an advisor’s business value can be maximized under a brokerage umbrella—and what 2 key factors they need to consider.
And, ultimately, why so many wirehouse advisors choose to go independent—especially when they are on the back 9 of their careers.

Louis shares 3 valuation scenarios that serve as the basis for these questions that advisors are asking:

How can it make sense to go independent where there’s no upfront money, when I can get a 300%+ deal from another major firm or opt-in to my firm’s retiring advisor program?
How do I rationalize giving up the bird-in-the-hand – that is, a retire-in-place program – with a preset multiple and without the hassles of going through a transition?
How do I build a business for maximum enterprise value?
How do you arrive at the valuation of an independent firm?

It’s a fact-filled episode which shares actionable data and advice for those at traditional brokerage firms—whether they are seasoned advisors considering their next chapter, or the next gen who is exploring how to build a business poised for maximum value.

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Related Resources

What’s the ‘Real’ Value of a Financial Advisor’s Business?
Headline-making M&A deals in the independent space have many employee advisors wondering what their business could be worth on the open market. Here are 3 valuation scenarios to address that curiosity. Read->

Multi-Generational Teams at a Crossroads: Wirehouse Sunset Program or Independence?
An in-depth look at the opportunities and options for retiring advisors and the next gen from an expert on the topic, Justin Weinkle, Director of Strategic Analysis at Dynasty Financial Partners. Read->

Determining Enterprise Value
7 Key Qualitative Drivers for Sellers. Read->

The Math Behind the Move to Independence
Why so many advisors are going indy, even with stiff competition from hefty brokerage firm transition deals. Read->