Business valuers are required (under the Red Book and IVS standards, for
instance) to maintain objectivity. It’s often one of the most challenging
parts of the profession, since nearly every engagement comes with pressure
from clients or third parties to either raise or lower the conclusion.
Meanwhile, there’s always a sense that a low-priced or less independent
practitioner will jump at the opportunity to provide the exact number the
client demands. Most BVWire—UK subscribers have lost business to
low-priced competitors or the many ‘£99 business valuation’ websites. It’s
frustrating when a business turns to a tainted provider knowing they can
get the number they want.
The real property valuers are currently receiving backlash for lack of
independence—and perhaps observers of the negative coverage in the
and elsewhere can help us all focus on the strength and independence of our
best work. This isn’t a new problem—RICS, of course, was founded by royal
charter in an effort to reduce speculating on land related to the railway
system. However, conflicts are more plausible when the biggest property
valuers (Savills, CBRE, Knight Frank, JLL) are also engaged in development
and ownership on a grand scale. Combine this concentration with the fact
that the Big Four audit essentially 100% of Britain’s listed companies, and
any casual observer can see possible threats to independence. It gets worse
when there’s an economic downturn.
Meanwhile, the real property market is controlled at the low end by ‘free’
and ‘instant’ property valuations from listing services like Zoopla. Their
free valuation tool offers estimates, and then passes the names of owners
who use it on to agents and surveyors as a lead source. Many have commented
one example complaining that automated valuation tools are misleading) that the Zoopla estimate and the value provided by the full property
valuation frequently have little in common.
Obviously, business valuers face these same problems, whether their work is
for commercial, fiscal, contentious, financial reporting, transactional, or
other purposes. For the most part, the small business valuation profession
in the UK should be commended for ‘taking the high road’ despite pressures
from the top—and from the bottom—of the market. There will always be
someone willing to provide a business valuation for less money, but neither
the clients, the public, nor the profession benefit.
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