When Should I Maximize the Value of My Business?

John Novachis • Jun 09, 2022

There is a lot of talk in the industry about business valuations.

Looking at advisor demographics and assets under administration (AUA), there seems to be approximately $250B-$350B of AUA connected to advisors who will reach retirement age in the next three to five years.

There’s also the fact that there’s not enough new advisors coming into the industry, and those that are able to acquire new books, don’t necessarily have the capitalization or resources.

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Market Volatility

With the recent volatility in the markets, I am often asked, ‘is now the right time to maximize the value of my business?’ Our methodology for valuing businesses adjusts for market volatility and any impacts it may have on overall revenue.

“It provides the protection advisors need in today’s world.”

We achieve this in the form of a “hedge” in our valuation equation and normalization of revenues based on a representation of financial markets versus the current one. Read my previous post on determining what’s a fair price for your business.

Six Steps to Success

The decision to monetize, exit or stagger the transition of your business involves many factors. Having worked with hundreds of advisors, I’ve narrowed it down to 6 steps to success:

Prepare financially
Prepare emotionally
Determine an exit date
Select the best exit plan
Choose your succession option
Implement your plan

Trying to time the market is something we deter clients against, similarly, this also applies to advisors and their succession plan. The right timing should be based on a well-thought-out plan (like you do for your clients) and should be no different for you as a business owner.

Succession on Your Terms

If you’re looking for choice and the ability to grow or succeed your business on your terms, our Pinnacle Advisor Program might be for you. It’s open to all advisors, regardless of whether you’re with IPC or not. This program provides advisors with an ability to monetize and de-risk the value of their business today, with the option to either sell and exit the business completely or continue to run the business (in whatever capacity you choose) and be rewarded for new asset growth. 

If you would like to have a one-on-one private conversation on how IPC can help you formulate your 6-step plan, feel free to contact me today. 

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Before You Sell - Consider This In Your Succession Plan

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In his latest blog, John Novachis, EVP at Investment Planning Counsel sheds light on emerging trends catching the attention of Advisors, but are these the right choice when considering your succession plan?

Part 2: Succession Planning - The Next Big Thing

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Valuating your Book of Business – Where “Art meets Science”

By John Novachis • 07 Dec, 2020

When speaking with independent financial advisors, I'm often asked “what is my business worth and how can I make it MORE valuable?” The issue with most valuation methods is that no single approach is 100% correct. Many involve making assumptions that can each impact many “sensitive" variables. In my simple world, the value of any business or transaction for that matter is what a seller and buyer agree is a fair price. To reach an agreement on a fair price, both parties need to see value in the deal.