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Post Options Post Options   Thanks (0) Thanks(0)   Quote Moraen Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 5:34am
Originally posted by bc2051 bc2051 wrote:

Salary sure, but I think it’s the 500k part where you’re losing everyone 

Fucking this.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Moraen Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 5:36am
Originally posted by Circles Circles wrote:

I've seen this deal happen multiple times in different industries with our clients. There is someone going to be paid to service those assets. They would rather it be you and what deal you get is much more related to how you approach it than the deal other people get.

You can absolutely get a buy out and then ask if you can stay on as an employee. 100%. It's either you or some dipshit who doesn't have a relationship with them. You're insane if you don't think they would rather it be you. You are in control.

You guys just like to argue. Last time I had a quote on my practice, it was almost $3,000,000 and that was over a year ago. Your revenue is part of it, but it's also what type of assets that you have, how efficiently run it is, etc. 


He always gives away the game. 

LOL


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Post Options Post Options   Thanks (0) Thanks(0)   Quote Hacksaw Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 9:03am
Originally posted by Circles Circles wrote:

I've seen this deal happen multiple times in different industries with our clients. There is someone going to be paid to service those assets. They would rather it be you and what deal you get is much more related to how you approach it than the deal other people get.

You can absolutely get a buy out and then ask if you can stay on as an employee. 100%. It's either you or some dipshit who doesn't have a relationship with them. You're insane if you don't think they would rather it be you. You are in control.

You guys just like to argue. Last time I had a quote on my practice, it was almost $3,000,000 and that was over a year ago. Your revenue is part of it, but it's also what type of assets that you have, how efficiently run it is, etc. 

Buy out and salary to stay on? 100%

Full value upfront payout with 50% of revenue moving forward?  Fuck no
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Circles Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 1:17pm
Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

I've seen this deal happen multiple times in different industries with our clients. There is someone going to be paid to service those assets. They would rather it be you and what deal you get is much more related to how you approach it than the deal other people get.

You can absolutely get a buy out and then ask if you can stay on as an employee. 100%. It's either you or some dipshit who doesn't have a relationship with them. You're insane if you don't think they would rather it be you. You are in control.

You guys just like to argue. Last time I had a quote on my practice, it was almost $3,000,000 and that was over a year ago. Your revenue is part of it, but it's also what type of assets that you have, how efficiently run it is, etc. 

Buy out and salary to stay on? 100%

Full value upfront payout with 50% of revenue moving forward?  Fuck no

I said 30-50%, whatever their grid is for a typical employee advisor. Dumbass.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Hacksaw Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 1:49pm
Originally posted by Circles Circles wrote:

Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

I've seen this deal happen multiple times in different industries with our clients. There is someone going to be paid to service those assets. They would rather it be you and what deal you get is much more related to how you approach it than the deal other people get.

You can absolutely get a buy out and then ask if you can stay on as an employee. 100%. It's either you or some dipshit who doesn't have a relationship with them. You're insane if you don't think they would rather it be you. You are in control.

You guys just like to argue. Last time I had a quote on my practice, it was almost $3,000,000 and that was over a year ago. Your revenue is part of it, but it's also what type of assets that you have, how efficiently run it is, etc. 

Buy out and salary to stay on? 100%

Full value upfront payout with 50% of revenue moving forward?  Fuck no

I said 30-50%, whatever their grid is for a typical employee advisor. Dumbass.

Except it still does not work at 30% because you're cash flowing negative as long as they remain. Dumbass
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Post Options Post Options   Thanks (0) Thanks(0)   Quote LA Broker Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 1:56pm
Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

I've seen this deal happen multiple times in different industries with our clients. There is someone going to be paid to service those assets. They would rather it be you and what deal you get is much more related to how you approach it than the deal other people get.

You can absolutely get a buy out and then ask if you can stay on as an employee. 100%. It's either you or some dipshit who doesn't have a relationship with them. You're insane if you don't think they would rather it be you. You are in control.

You guys just like to argue. Last time I had a quote on my practice, it was almost $3,000,000 and that was over a year ago. Your revenue is part of it, but it's also what type of assets that you have, how efficiently run it is, etc. 

Buy out and salary to stay on? 100%

Full value upfront payout with 50% of revenue moving forward?  Fuck no

I said 30-50%, whatever their grid is for a typical employee advisor. Dumbass.

Except it still does not work at 30% because you're cash flowing negative as long as they remain. Dumbass

I’m not trying to side with CLAB on any issue, ever, but as I said in one of the previous pages, the wires typically pay million dollar producers 250% ( front and back end) and obviously still the grid (40%). 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote WarPig Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 1:57pm
Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

I've seen this deal happen multiple times in different industries with our clients. There is someone going to be paid to service those assets. They would rather it be you and what deal you get is much more related to how you approach it than the deal other people get.

You can absolutely get a buy out and then ask if you can stay on as an employee. 100%. It's either you or some dipshit who doesn't have a relationship with them. You're insane if you don't think they would rather it be you. You are in control.

You guys just like to argue. Last time I had a quote on my practice, it was almost $3,000,000 and that was over a year ago. Your revenue is part of it, but it's also what type of assets that you have, how efficiently run it is, etc. 

Buy out and salary to stay on? 100%

Full value upfront payout with 50% of revenue moving forward?  Fuck no

I said 30-50%, whatever their grid is for a typical employee advisor. Dumbass.

Except it still does not work at 30% because you're cash flowing negative as long as they remain. Dumbass

30% could work depending on the avg. age of the client.  It's not a deal anyone here could make but a 5 billion dollar RIA might see that as a good return on their investment.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 1:59pm
Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

I've seen this deal happen multiple times in different industries with our clients. There is someone going to be paid to service those assets. They would rather it be you and what deal you get is much more related to how you approach it than the deal other people get.

You can absolutely get a buy out and then ask if you can stay on as an employee. 100%. It's either you or some dipshit who doesn't have a relationship with them. You're insane if you don't think they would rather it be you. You are in control.

You guys just like to argue. Last time I had a quote on my practice, it was almost $3,000,000 and that was over a year ago. Your revenue is part of it, but it's also what type of assets that you have, how efficiently run it is, etc. 

Buy out and salary to stay on? 100%

Full value upfront payout with 50% of revenue moving forward?  Fuck no

I said 30-50%, whatever their grid is for a typical employee advisor. Dumbass.

Except it still does not work at 30% because you're cash flowing negative as long as they remain. Dumbass

No, on 3X and 40% payout, the firm would break-even probably after 7+ years (it could be a little longer, but it depends on the amount of benefits, and other costs incurred with that book, like if they needed a dedicated assistant, etc.). Based on JUST the 3x upfront and 40% payout, the break-even is 5 years. But there are a lot of other costs associated with a book of a decent size.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Hacksaw Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 3:36pm
Originally posted by LA Broker LA Broker wrote:

Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

I've seen this deal happen multiple times in different industries with our clients. There is someone going to be paid to service those assets. They would rather it be you and what deal you get is much more related to how you approach it than the deal other people get.

You can absolutely get a buy out and then ask if you can stay on as an employee. 100%. It's either you or some dipshit who doesn't have a relationship with them. You're insane if you don't think they would rather it be you. You are in control.

You guys just like to argue. Last time I had a quote on my practice, it was almost $3,000,000 and that was over a year ago. Your revenue is part of it, but it's also what type of assets that you have, how efficiently run it is, etc. 

Buy out and salary to stay on? 100%

Full value upfront payout with 50% of revenue moving forward?  Fuck no

I said 30-50%, whatever their grid is for a typical employee advisor. Dumbass.

Except it still does not work at 30% because you're cash flowing negative as long as they remain. Dumbass

I’m not trying to side with CLAB on any issue, ever, but as I said in one of the previous pages, the wires typically pay million dollar producers 250% ( front and back end) and obviously still the grid (40%). 

The 250% is over the handcuffs (7-9 years) and based off asset growth.  Not nearly the same thing.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Hacksaw Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 4:02pm
Originally posted by B24 B24 wrote:

Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

Originally posted by Hacksaw Hacksaw wrote:

Originally posted by Circles Circles wrote:

I've seen this deal happen multiple times in different industries with our clients. There is someone going to be paid to service those assets. They would rather it be you and what deal you get is much more related to how you approach it than the deal other people get.

You can absolutely get a buy out and then ask if you can stay on as an employee. 100%. It's either you or some dipshit who doesn't have a relationship with them. You're insane if you don't think they would rather it be you. You are in control.

You guys just like to argue. Last time I had a quote on my practice, it was almost $3,000,000 and that was over a year ago. Your revenue is part of it, but it's also what type of assets that you have, how efficiently run it is, etc. 

Buy out and salary to stay on? 100%

Full value upfront payout with 50% of revenue moving forward?  Fuck no

I said 30-50%, whatever their grid is for a typical employee advisor. Dumbass.

Except it still does not work at 30% because you're cash flowing negative as long as they remain. Dumbass

No, on 3X and 40% payout, the firm would break-even probably after 7+ years (it could be a little longer, but it depends on the amount of benefits, and other costs incurred with that book, like if they needed a dedicated assistant, etc.). Based on JUST the 3x upfront and 40% payout, the break-even is 5 years. But there are a lot of other costs associated with a book of a decent size.

No firm is able to take on a $1.1mm practice with zero additional overhead.  It is not possible for a firm to do this unless they already have capacity, but even then, they would attribute that cost to the book for profitability calculations.

And CLAB's point was "ThEy GoT tO pAy SoMeOnE" so you have some additional overhead even once they are gone in this deal.

I literally have a cashflow spreadsheet for this purpose because I am transitioning a book right now that I brought in.

This deal is not happening.  No how, no where.  It is not profitable unless the firm had zero overhead that you are keeping (not likely).

Now can you do a deal that is an upfront amount and a consulting/service agreement to stay on?  Hell yeah.  But you're not getting a full valuation upfront AND a normal payout.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote helado Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 4:15pm
As usual, CLAB is a clown.  He didn't get a detailed offer for 300% plus to stay at a real payout.

Even when deals at the wires were 350%, only 175% of that was up front (and that was only for very large producers).

The rest was back end stuff that was contingent on not just bringing over the full book, but growing it to hit the later hurdles.

That is not the same thing here.  I would happily buy a book for 175%, pay a 40% payout, and then give them some deferred lump sums contingent on the entire book staying and the person growing it.  
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Iamlegend Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 5:03pm
Originally posted by helado helado wrote:

As usual, CLAB is a clown.  He didn't get a detailed offer for 300% plus to stay at a real payout.

Even when deals at the wires were 350%, only 175% of that was up front (and that was only for very large producers).

The rest was back end stuff that was contingent on not just bringing over the full book, but growing it to hit the later hurdles.

That is not the same thing here.  I would happily buy a book for 175%, pay a 40% payout, and then give them some deferred lump sums contingent on the entire book staying and the person growing it.  

There are currently deals with 200% upfront from WFA. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Circles Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 5:34pm
Again, this is 2 separate transactions. Whether they give you a buyout or not, they have to pay someone a decent salary/grid to continue working that book. It doesn't change the numbers either way. You are simply telling them, "hey, instead of you hiring someone who doesn't know these people, i'll just work for you". 

Whether you stay or not, nothing changes for them. They just know they will keep more of it if it's you. 

You guys seem to keep lumping this together as some sort of payout/buyout deal like a sunset plan. No. I'll take the upfront money and you own everything going forward. I just want to get paid what you would pay someone else.

In that scenario, you win and it changes nothing for them. Unless, like i said you're some smuck buying a book to grow your own assets. But the people paying the large buyouts are large firms.

We just did this with a client. It happens all the time. $1.5 Million in revenue. Cleared $500,000 a year in personal income after all expenses. He took a buyout of $4 Million for his business and stayed on full time for $200k a year.


Edited by Circles - Feb/25/2021 at 5:38pm
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Post Options Post Options   Thanks (0) Thanks(0)   Quote helado Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 5:38pm
Originally posted by Iamlegend Iamlegend wrote:

Originally posted by helado helado wrote:

As usual, CLAB is a clown.  He didn't get a detailed offer for 300% plus to stay at a real payout.

Even when deals at the wires were 350%, only 175% of that was up front (and that was only for very large producers).

The rest was back end stuff that was contingent on not just bringing over the full book, but growing it to hit the later hurdles.

That is not the same thing here.  I would happily buy a book for 175%, pay a 40% payout, and then give them some deferred lump sums contingent on the entire book staying and the person growing it.  

There are currently deals with 200% upfront from WFA. 

But are they 350% total?  I'm guessing they top out closer to 275-300%, no?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote helado Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 5:44pm
Originally posted by Circles Circles wrote:

Again, this is 2 separate transactions. Whether they give you a buyout or not, they have to pay someone a decent salary/grid to continue working that book. It doesn't change the numbers either way. You are simply telling them, "hey, instead of you hiring someone who doesn't know these people, i'll just work for you". 

Whether you stay or not, nothing changes for them. They just know they will keep more of it if it's you. 

You guys seem to keep lumping this together as some sort of payout/buyout deal like a sunset plan. No. I'll take the upfront money and you own everything going forward. I just want to get paid what you would pay someone else.

In that scenario, you win and it changes nothing for them. Unless, like i said you're some smuck buying a book to grow your own assets. But the people paying the large buyouts are large firms.

We just did this with a client. It happens all the time. $1.5 Million in revenue. Cleared $500,000 a year in personal income after all expenses. He took a buyout of $4 Million for his business and stayed on full time for $200k a year.

You aren't wrong in concept.  But what you are wrong about is the compensation for you to stay.  The firms that just "pay somebody to take care of those clients..." like Fisher or Fidelity has a relationship manager masquerading as a financial advisor...

They don't make what we make.  Some of them make decent money ($200K+ is possible), but they are making that money to cover a much larger asset base than we would to make $200K.

I'm fairly certain that a single "advisor" at Fisher oversees like $500 million in AUM.  Their ONLY job is to babysit clients.  Not prospect.  Not pay bills. Not manage assistants.  Etc.

They aren't going to pay you 40%+ of revenues to babysit clients they just paid you for.  It just doesn't work that way.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote indysomeday Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 5:50pm
Wasn't that untied capitals business model before they were acquired by Goldman? Rolling up RIAs and then keeping them on to manage their business using UCs infrastructure. I have no idea what the payouts were though
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Post Options Post Options   Thanks (0) Thanks(0)   Quote WarPig Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 7:54pm
Originally posted by indysomeday indysomeday wrote:

Wasn't that untied capitals business model before they were acquired by Goldman? Rolling up RIAs and then keeping them on to manage their business using UCs infrastructure. I have no idea what the payouts were though

Yes
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Post Options Post Options   Thanks (0) Thanks(0)   Quote RIArules Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 8:50pm
Private equity buys CPA firms nowadays, it’s tricky with control, licensing and requirements regarding attestation.  But it does happen.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Iamlegend Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 8:51pm
Originally posted by helado helado wrote:

Originally posted by Iamlegend Iamlegend wrote:

Originally posted by helado helado wrote:

As usual, CLAB is a clown.  He didn't get a detailed offer for 300% plus to stay at a real payout.

Even when deals at the wires were 350%, only 175% of that was up front (and that was only for very large producers).

The rest was back end stuff that was contingent on not just bringing over the full book, but growing it to hit the later hurdles.

That is not the same thing here.  I would happily buy a book for 175%, pay a 40% payout, and then give them some deferred lump sums contingent on the entire book staying and the person growing it.  

There are currently deals with 200% upfront from WFA. 

But are they 350% total?  I'm guessing they top out closer to 275-300%, no?

I think 325%
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Post Options Post Options   Thanks (0) Thanks(0)   Quote RIArules Quote  Post ReplyReply Direct Link To This Post Posted: Feb/25/2021 at 8:54pm
The problem I see here is the fluidity and lack of barriers.  Professional businesses are not the same as others.  My BIL died last year and no one made an offer at all for his setup.  Chiropractor, but I think he grossed close to $500,000 with very little overhead.  
If only I sucked Bank Dick and got a pseudo Ivy League certificate, perhaps it would make me feel better?
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