26 min

Q105 - Will My Practice Have A Higher Valuation In The RIA Model‪?‬ Transition To RIA Podcast

    • Investing

Will the marketplace assign a higher valuation to your practice in the RIA model?While there are multiple variables that go into a valuation calculation, there are some basic economic truths involved.Consider an analogy.You own a house and desire to sell it. Naturally, you’d like the highest price you can get for it.Imagine if you lived in an HOA community and the HOA got to dictate how your sale process will occur, under what terms you can sell the house, who the potential buyers can be, etc.Will that result in the highest valuation?Or perhaps your community doesn’t have an HOA, but hypothetically the only eligible buyers of your house must come from within your neighborhood itself.Will that result in the highest valuation?You might find both scenarios preposterous. But that is the equivalent reality many advisors face, due to the affiliation model they’re in, when trying to derive value from their practice at the end of their careers.In this episode of the Transition To RIA question & answer series I address some of the variables of why a practice valuation is higher in the RIA model.Come take a listen!P.S. Prefer video? You can find this entire series in video format on Youtube. Search for the TRANSITION TO RIA channel.Show notes: https://TransitionToRIA.com/will-my-practice-have-a-higher-valuation-in-the-ria-model/ (https://TransitionToRIA.com/will-my-practice-have-a-higher-valuation-in-the-ria-model/)About Host: Brad Wales is the founder of Transition To RIA (https://transitiontoria.com/), where he helps financial advisors understand everything there is to know about WHY and HOW to transition their practice to the Registered Investment Advisor (RIA) model. Brad has 20+ years of industry experience, including direct RIA related roles in Compliance, Finance and Business Development. He has an MBA and has held the 4, 7, 24, 63 & 65 licenses. The Transition To RIA website (TransitionToRIA.com) has a large catalog of free videos, articles, whitepapers, as well as other resources to help advisors understand the RIA model and how it would apply to their unique circumstances.

Will the marketplace assign a higher valuation to your practice in the RIA model?While there are multiple variables that go into a valuation calculation, there are some basic economic truths involved.Consider an analogy.You own a house and desire to sell it. Naturally, you’d like the highest price you can get for it.Imagine if you lived in an HOA community and the HOA got to dictate how your sale process will occur, under what terms you can sell the house, who the potential buyers can be, etc.Will that result in the highest valuation?Or perhaps your community doesn’t have an HOA, but hypothetically the only eligible buyers of your house must come from within your neighborhood itself.Will that result in the highest valuation?You might find both scenarios preposterous. But that is the equivalent reality many advisors face, due to the affiliation model they’re in, when trying to derive value from their practice at the end of their careers.In this episode of the Transition To RIA question & answer series I address some of the variables of why a practice valuation is higher in the RIA model.Come take a listen!P.S. Prefer video? You can find this entire series in video format on Youtube. Search for the TRANSITION TO RIA channel.Show notes: https://TransitionToRIA.com/will-my-practice-have-a-higher-valuation-in-the-ria-model/ (https://TransitionToRIA.com/will-my-practice-have-a-higher-valuation-in-the-ria-model/)About Host: Brad Wales is the founder of Transition To RIA (https://transitiontoria.com/), where he helps financial advisors understand everything there is to know about WHY and HOW to transition their practice to the Registered Investment Advisor (RIA) model. Brad has 20+ years of industry experience, including direct RIA related roles in Compliance, Finance and Business Development. He has an MBA and has held the 4, 7, 24, 63 & 65 licenses. The Transition To RIA website (TransitionToRIA.com) has a large catalog of free videos, articles, whitepapers, as well as other resources to help advisors understand the RIA model and how it would apply to their unique circumstances.

26 min