JPTD consults on a $600k All In Offer for a $150k Advisor
Practice Background
Our client was a part-time financial advisor with 15 years of experience. She has a passion for financial planning but didn't necessarily want to choose the investments, spend time doing client service or dealing with compliance. She was looking for a firm that had a need for someone to run their planning department and would partner her with an advisor who could execute the tasks that she didn't want to do.
Client Objective
The client's goals are:
- Find a company that would buy her wealth management revenue at a competitive multiple
- Be able to keep and grow her financial planning revenue (presently $50k/year)
- Get some compensation for acquiring new planning clients and referring them to the firm
- Have the flexibility to pursue her outside activities
Key Data
Top line revenue - $200k ($150k wealth and $50k financial planning fee's)
AUM - $33m
Total cash value life insurance - $1.2m
5 year CAGR - 8%
All-In Offer* Highlights
- Up front consideration - $400k
- Consideration at the end of year 1 - $200k assuming 90% of assets move over. Pro rata less than 90%.
- Ability to keep existing financial planning revenue as well as keep 100% of future planning revenue from new and existing clients
- 25% of all commission and fee products referred to new firm at an 80% payout
- Maintains equity in all planning fees and commissions to resell at a later date
*An All In Offer includes any money paid upfront, signing bonus, salary and potential earn-outs based on growth. It does not include retirement or overrides on production. Assumes you hit all required transition, retention and growth expectations.