Financial Advisory Valuations
Financial advisories help individuals, businesses, and other organizations effectively manage their finances. There is a steady demand for these services in our complex financial environment. As such, buying, growing, or selling a financial advisory can be lucrative. If you are looking to buy, grow, or sell a financial advisory, a financial planning practice valuation is crucial. As part of a business valuation for a financial planning practice, you will learn how to maximize the value of a financial advisory.
Peak Business Valuation frequently works with financial advisories throughout the United States. In this article, we discuss how to value a financial advisory practice. Several headings throughout the article provide links to related articles. Click these links to learn more about valuing a financial advisory!
As a professional business appraiser, Peak Business Valuation values financial planning practices on a regular basis. We are happy to provide you with a business valuation for a financial planning practice. Get started today by scheduling a free consultation with Peak Business Valuation below!
Valuing a Financial Advisory
Valuation experts consider several factors during a financial advisory valuation. First, they look at the business’s financial statements to gather data. With this information, they can choose the best valuation approach for the financial planning practice. Some common valuation methods are the market approach, the income approach, and the asset approach. The market approach is very common when valuing a financial advisory. It utilizes financial advisory multiples. We discuss this approach in the following section.
As part of the financial advisory valuation process, business appraisers determine the fair market value of a financial advisory. This information is featured in the valuation report. In addition, the valuation report summarizes the financial planning practice’s strengths, weaknesses, risks, and opportunities. As such, securing a financial planning practice valuation can help you understand how to improve your financial planning practice. Reach out to Peak Business Valuation to learn more!
Valuation Multiples for a Financial Advisory Firm
When valuing a financial advisory with the market approach, business appraisers utilize valuation multiples. Financial advisory multiples are financial ratios that compare the value of a business to the financial performance of similar businesses on the market. Valuation analysts determine the most applicable multiples for a financial advisory during the valuation process. At Peak Business Valuation, our appraisers frequently work with SDE multiples, EBITDA multiples, and REV multiples for a financial planning practice. To learn more, check out Valuation Multiples for a Financial Advisory.
Value Drivers for a Financial Advisory
Business appraisers also assess a financial planning practice’s value drivers during a financial advisory valuation. Value drivers are factors that affect a financial planning business’s overall performance and value. Understanding a financial advisory’s key value drivers can help you identify any areas of improvement for your firm.
One of the most important value drivers for financial planning practices is having strong client relationships. This promotion can lead to word-of-mouth referrals and recurring revenue. Another value driver for financial advisories is having diverse revenue streams. Offering a variety of financial services can help you maximize sales revenue at your financial planning practice.
Assessing a financial planning practice’s value drivers helps business appraisers understand how your financial advisory performs against competitors. This can help you take steps to maximize the value and performance of your financial planning practice. See Value Drivers for a Financial Advisory to learn more.
How to Value a Financial Advisory Practice
There are several common business valuation methods for valuing a financial planning practice. At Peak, we often use the market approach and/or the income approach. The market approach uses financial advisory market multiples. This allows them to to assess similar businesses on the open market to determine your financial planning practice’s fair market value. Conversely, the income approach measures a financial planning practice’s value by considering its cash flow potential and risks. The financial planning practice valuation process often involves a combination of these approaches.
To learn more, check out How to Value a Financial Advisory.
Business Valuation for Buying a Financial Planning Practice
If you plan to buy a financial planning practice, a financial advisory valuation is an essential tool. As part of a business valuation, you will learn the fair market value of a financial planning practice. This can help financial advisory buyers negotiate a favorable purchase price. Read Valuation for Buying a Financial Advisory Business to learn more.
Peak Business Valuation, professional business appraiser, works with individuals buying, growing, or selling financial advisories throughout the nation. We are happy to help you with a financial advisory valuation! Peak can also answer any questions on how to value a financial advisory practice. Schedule your free consultation with Peak Business Valuation to get started!
Business Valuation for Selling a Financial Advisory
Obtaining a business valuation is also important if you are looking to sell a financial planning practice. By learning a financial planning practice’s fair market value, you can set an appropriate listing price. Additionally, the financial planning practice valuation report explains the strengths and weaknesses of a financial planning practice. You can use this information to increase the value of a financial advisory before selling.
Gift and Estate Valuation for a Financial Advisory
Moreover, if your financial planning practice is part of your estate or if you are gifting a financial advisory to family members, it is important to receive a gift and estate valuation for a financial planning practice. A gift and estate valuation can help financial planning practice owners prepare for the future. For instance, a gift and estate valuation can help financial advisories maximize tax benefits. Schedule a free consultation with Peak Business Valuation to get started!
SBA Financing for a Financial Advisory
Finally, starting, buying, or expanding a financial planning practice can be a large investment. If you are seeking financing for a financial planning practice, the Small Business Administration offers several convenient financing options. SBA loans have long repayment terms, low interest rates, and low down payments. This makes SBA loans more affordable than traditional loan options. Peak Business Valuation, business appraiser, works with over 90 SBA lenders throughout the United States. We are happy to connect you with an SBA lender for financial advisories.
To learn more, see SBA Loans for Financial Advisories.
Peak Business Valuation, business appraiser, is here to provide you with a business valuation for a financial planning practice. We can also discuss any inquiries on how to value a financial advisory practice. Start today by scheduling your free consultation with Peak Business Valuation below!
