RIA Valuations

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Looking to transition out of the business? I’ve worked with an office that was able to get 4x the valuation because of an optimized CRM. An optimized CRM adds value to the sale price in a succession. Give the buying party a way to quantify your book of business with metrics and reports to back it up.

Sale Options you as the seller should consider:


Parameters prospective buyers will consider when evaluating a book of business:

-Employee Retention
-Types of Assets  


Top 3 Potential Considerations When Buying or Selling a Financial Advisory Practice

  1. Employee Retention – how many staff members will stay on? What will their role be in the future after the firm is sold?
  2. Technology – how efficient is the technology of a firm? How is the quality of data? 
  3. Types of Assets – how sticky is your book of business? Is there potential for upsell? 


How CRM Software Impacts RIA Valuations

The efficiency and quality of data in a firm’s CRM software can impact RIA valuations greatly. Well-documented client relationships across an entire book of business can help seller’s quickly identify your client base and understand if they are a good fit for their firm. In the long run, this saves the buyer and seller a lot of time and money because you are both knowledgeable about what is being sold. Think about when someone is selling a home. When a home has been completely renovated up to code, it allows the seller to know exactly what they are purchasing. 

An effective CRM has the following:

Addresses and phone numbers entered correctly.
Products and services assigned and arranged for further prospecting.
A consistent sales pipeline and process represented.

If information within a CRM is navigable, more value is given to that book of business. 


The Value of a CRM for Financial Mergers and Acquisitions

Of all the technology available today, the Customer Relationship Management (CRM) software serves as the foundation of the technology stack for a firm. It is important to have an up-to-date CRM that shows a potential buyer the depth and breadth of your relationships you have with your clients. Allowing them to better serve and, ultimately, retain the clients after a sale.

It is critical for a selling firm to make the transition of that client relationship easier. This is where the CRM comes in. For example, if you don’t differentiate between ex wife 1 and ex wife 2 of a client, it can make the transition feel ingenuine. As most home buyers prefer a turnkey home, most book of business buyers prefer a turnkey CRM.

Document client relationships in the CRM like:

-How they prefer to be contacted
-Their current financial situation
-Current family dynamics
-Power of attorneys, CPA’s, and lawyers of clients

One way a firm can take on more clients is leveraging CRM processes. With successful Workflows in place, an office can take on more leads, onboard more prospects, and offer a higher level of customer service to more clients. If you want to set yourself apart from other advisors, or even robo-advisors, then buy our customized template packages and training. If selling a financial advisory practice is in your future, your investment will return tenfold. 

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