![]() Within the valuation industry, the three approaches to valuing a business are: the asset, income and market approaches. ![]() Approaches to Valuation for Wealth Management Firms The longevity and predictability of those assets are difficult to ascertain – and, in many cases, firms do not have legal rights to those assets except for those cases in which employment agreements have been signed. Business is typically based on close personal contacts, mutual trust and the collective reputation of the firm and its key professionals. The major driver of value is a “two legged” asset that goes home every night, the human capital. Tangible assets are negligible among wealth management firms. ![]() As such, the valuations of wealth management firms present a number of special considerations. ![]() These firms come in many shapes and sizes, and vary widely in terms of the key components that drive value. Wealth management firms are brimming with talent, brain power, energy and most importantly, revenue-generating capacity. ![]()
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