The valuation analysis you need can vary depending on the purpose for your valuation. FP Transitions tailors our analysis to what you've built and what you want to accomplish. There are two primary methods used to value an independent financial advisor's business, the market approach and the income approach.

FP Transitions is most well known for using our market data to help advisors sell a book of business on the open market. However, we leverage our valuation and M&A expertise to help financial advisors establish the value of their enterprise on the open market, not just the client accounts, assets, and revenues.

Using rule of thumb multiples on revenue, EBOC, or EBITDA can sometimes do more harm than good. Multiples are always outputs of deals, not inputs, and include assumptions that may not be applicable to your business or your deal structure. For example, the difference between the seven times and the nine times multiple on your earnings can result in a material difference in value if you're only relying on a rule of thumb.

Many advisors think that they only need a business valuation when it's time to retire or when they're selling their business. However, it's crucial to monitor your business value annually to ensure that you're on track to achieve your goals. An annual valuation is a measuring point to see how the investments that you've made in your business impact your market value or your share price.

Trust FP Transitions to provide data driven insights for your business and help you accomplish your strategic objectives.