Selling Your Financial Advisor Business

According to the CFP Board, 48% of its 86,910 members are over fifty years old. That’s more than forty thousand financial advisors who will be looking to retire in the next two decades. Are you one of them? Have you considered selling your advisory practice?

Selling a financial advisor business is not something that happens overnight. Determining an asking price is only one small element of putting a deal together. Here at Bridgemark Strategies, we can help you with the creation and execution of an effective sales plan. Contact us today for more information.

When Should You Sell Your Practice?

Timing is everything. Business valuations are based on profitability and growth rate. The best time to sell your practice is when you have the proper amount of time to find a buyer and a smooth transition, which can take two years or longer. Practices that choose to sell too late are more likely to get a reduced price.

Building AUM and Selling Advisory Practices as a Business Model

Retirement is only one of many reasons to sell a financial advisor business. Some advisors specialize in creating growth strategies and actually build and sell more than once. It’s a profitable business model. Ask one of our consultants for advice if that’s the path you want to follow.

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 y