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How Can You Maximize Your Firm’s Value Before You Sell?


Early-career advisors tend to focus on growing their book of business, while mid-career advisors often want to scale their firms upward without sacrificing their client experience. But late-career advisors face a whole new set of challenges. Mainly, figuring out what will happen to their firm once they retire.

Whether you’re thinking of selling your firm or turning to a trusted successor in the future, you’ll want to maximize your profits and create a solid foundation before you pass on the torch. 

When it comes to increasing your profits and raising your firm’s valuation, it can be tough to know where your dollar is best spent. Do you hire more talent? Invest in better marketing? Roll out new technology? What will have the biggest impact in both the short and long term?

Riskalyze is here to help. We know that the “maximize” mindset comes with several hurdles – all of which can be addressed and solved through future-focused tech.


The “Maximize” Mindset


When you’ve been in the advising game for several decades, your priorities have likely shifted further away from “growth, growth and more growth.” 

You’ve done the heavy lifting and built your empire, now how can you make sure it survives even after you retire to that beach in Florida? After all, your business doesn’t have to close up shop just because you turn in your briefcase for a set of golf clubs – and your clients will appreciate that you left them in good hands.

Will you sell your firm? Hand it over to a well-appointed successor? If so, how can you maximize your firm’s value before you step away from the helm?

It’s important to think about how to protect your business value in the long term. In all likelihood, you’ll want to develop a game plan to connect with the children of existing clients to retain assets.
 

One of the most important keys to a solid long-term successor strategy is your tech stack – and Riskalyze knows just what you need to set your firm up for multi-generational wins. 


Mergers and Acquisitions for Financial Advisors


With mergers and acquisitions on the rise for financial advisory practices both big and small, it begs the question: how can a firm looking to sell in the near future maximize their valuation, while also easing the transition of ownership?

Many advisors choose to stay onboard at their firm for the first few years after selling, creating a gradual shift toward retirement. This is a perk for unrelated buyers as well as they have someone on staff to help train on processes and workflows. 

But what happens if the gradual fade-out isn’t your style? What if you’re ready to step down from the helm, and aren’t interested in sticking around to smooth things over?

In both cases, but especially the latter, it’s crucial to have efficient, easy to use systems in place that drive up your firm’s valuation and attract buyers – and there are buyers out there looking for the right firm to add to their belt. In fact, hundreds of mergers and acquisitions occur each year in the United States.

In 2021, Goldman Sachs became the top buyer in financial advisory firm M&As – advising on 76 deals worth more than $134.1 billion in total. JP Morgan snagged second place with 68 deals valued at $106.6 billion, while Morgan Stanley’s third place spot boasted 44 deals with $91.1 billion. How can you get the attention of these big name giants? The key is in your firm’s valuation.
 

Financial advisor valuations aren’t an exact science – there are so many different data points that contribute to your firm’s overall price tag. But a few things that contribute to higher valuations across the board? Top of the line client service, exceptional recruiting and talent acquisition practices, and smart growth initiatives. These three factors in tandem with one another create a harmonic workplace – one that’s worth a lot to potential buyers. 

The foundation for each of these areas begins with choosing and implementing the right tech stack for your practice. 


The Power of Tech


One major influencer in the world of business valuation is the tech you use. With the right tech by your side, you can increase workplace efficiency and drive up profits.

Riskalyze gives you streamlined processes for everyday tasks like sending proposals, identifying risk tolerance and gathering client data. Tech can also help you maximize value through building processes, increasing client retention, and more. 

Build Processes 

Attract more buyers with tech they’re already familiar with – and that really works.

When you have tech capable of widespread integrations, client updating, and automated workflows, your buyers (and clients) will have a smoother transition to ownership. 

Riskalyze offers integrations with your favorite software systems like Redtail, Salesforce, Junxure, SmartOffice and Wealthbox.

Increase Client Retention

Understanding risk is key to keeping your clients calm during market upsets. Take the recent bear market, for example – which officially occurred on June 13, 2022 when the U.S. stock market fell 20% from its previous high in January. Clients that have began investing in the past decade or so are probably new to major market downturns – and likely in a panic mode as their accounts lose value. Those with a strong grasp on their risk management and portfolio are more likely to remain calm and trust the process.

An accurate risk assessment helps clients understand long-term outlooks when the market gets shaky. Luckily, Riskalyze offers an easy and accurate tool you can use to pinpoint a client or prospect’s exact risk tolerance. You can also use Riskalyze’s research to supplement your blog about market news and link to Riskalyze surveys to help better explain risk management.

Expand Your Marketing Tools

Riskalyze also helps expand your marketing tactics with our one of a kind risk tolerance questionnaire. You can draw in prospects and wow them from the start with personalized risk-centered advice and resources. 

Add the Riskalyze touch to your marketing to help expand your reach and draw in audiences. 

Increase Referrals 

Better client experiences means happier customers. Those customer in turn share their experiences through online reviews and word of mouth – increasing your referral rate. Even if your focus is less on growth these days, referrals play a key part in monitoring your client satisfaction and growing your firm’s rapport. 

In some cases, your client may even refer a family member of theirs to your firm – potentially uncovering hidden-away assets in the process (we’re looking at you, Clint Potts).

Keep it in the Family 

Just like you’ll eventually move on from your practice, your clients will also cross that rainbow bridge one day – leaving their accumulated wealth behind for their children and loved ones. 

It’s a good idea to connect with those individuals long before that day arrives so that you already have a foundation of trust to build off of moving forward. In the best case scenario, those children will have heard tales of your superior financial planning from their parents and decide to continue working with you themselves. 


Greater Profits, Greater Stability 


All these perks lead to increased profitability for your firm, which in turn results in better valuations. 

Another big reason to invest in tech now? Beyond bigger bucks, you’ll also enjoy easier workflows. You can spend the later years of your career enjoying the fruits of your labor rather than fighting bad tech or having to calm down clients during downturns. Riskalyze can help you set the right expectations early and guide clients through both the good and bad times accordingly. 

To maximize your profits and create a solid foundation for years to come, Riskalyze is here to help your firm implement the proper technology for both you and your clients. 


Find Your Firm’s Future with Riskalyze 


Your tech stack sets the tone of your entire firm – both now and down the road. Riskalyze is proud to offer the tools you need for success, including:

  • Risk alignment software
  • Portfolio analytics and research
  • Trading and account monitoring
  • Compliance resources
  • And more

Click here to learn how Riskalyze can help you capture prospects, connect with clients and build a solid foundation for future success.