A Profitable Market
Over the last 15 years, the amount of money advisors can get for their business has risen astronomically. As recently as 10 years ago, Morgan Stanley was quoted to have increased their deal to pay an advisor up to 100% of trailing 12-month production with 75% being cash and the remainder in equity. Today, these deals at the Wirehouses can top 350% including back end bonuses. For independent advisors, business valuation multiples have also grown from nothing, when an advisor would just retire, up to ten times profits or more.
The Importance of a Plan
Most advisors haven’t spent the time and taken the steps to take advantage of today’s all-time high valuations. In fact, fewer than 20% of advisors have an exit plan. Studies indicate, however, that a long-term strategy for selling your practice implemented years in advance can increase the value of your business, enhance the service you provide to your clients, and dramatically increase money in your pocket.