Key ratios for investment advisory firms

BVWireIssue #173-1
BVWireIssue #173-1
February 1, 2017

The largest database of sales transactions involving investment advisory firms is maintained by FP Transitions, an Oregon firm that has done over 8,000 valuations of these businesses since 1999. In addition to doing appraisals, the firm is also a broker of financial services practices.

During a recent BVR webinar, Warren Burkholder, a valuation consultant with the firm, shared with the audience some key ratios developed from the database, which contains 880 private-company transactions and calculates 130 data points on each one. The ratios (see table below) are sales price (SP) over revenue (Rev), assets under management (AUM), recurring revenue (Rec Rev), and discretionary earnings (DE).

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During the webinar, a number of listeners quickly asked, “Is your database available for sale?” Burkholder replied that, while this is a proprietary database, they would respond to requests for access to it on a case-by-case basis. If you are interested, you can contact him at And you can access his full webinar, Valuation of Investment Advisory Firms, if you click here.

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