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Monetary Compensation Terms
Moving to Fee Based Compensation
Business Value Assessment
Preparing Your Business for Sale
Developing a Buying Strategy
100
The commission that is included in the price of most mutual funds. You pay either a front-end when you buy units in the fund or a back-end when you sell units.
What is a load?
100
-My knowledge and experience in the industry -What the market/client will pay -Profitability analysis
What are Influencers in setting hourly fees?
100
The more other advisors want your business the higher multiple you can get.
What is Supply & Demand?
100
“Would you sell to anyone?”
What is the main question you need to ask someone that is selling their business?
100
-what you want and why -the timing -how much can you pay -what is the ultimate outcome you are seeking
What is your written strategy?
200
It is the management fee plus the operating expenses of a mutual fund, expressed as a percentage of the average net asset value of the fund during the year.
What is the Management expense ratio (MER)
200
-Face to face meetings with clients is the best as opposed to e-mail or written correspondence -Have a script to outline the reason for changes -Create a letter that mirrors your script
What are parts of a communication transition plan?
200
The methodology most often applied to internal succession or partner negotiations.
What is EBIT? (Earnings before Interest and Tax)
200
- Look within the firm - Referrals from wholesalers or people within network - Advertising
What is How to find a buyer or a "match”?
200
You must be able to demonstrate previous success in your own business and a clear value proposition to the vendor, clients and staff.
What is your value proposition 'above cheque book'?
300
” an advisor usually charges the client a % of assets under management e.g. 1% per year on the clients first 500,000 of assets, 0.5 per year on the next 1.5 million. Etc.
What is “Fee based”
300
Clients get a highly valued service & the advisor is better able to provide appropriate recommendations
What is "why to move to a Fee Based model?"
300
• Sale negotiations • Finance approvals • Succession strategies
What are Fair Market Value Assessments used for?
300
Clients need to be loyal to your “practice” not to “you” or you will have nothing to sell.
What is "building a brand?"
300
These should be established and monitored. All parties should agree to and commit to ensure the process gets to a 'go' or 'no go' expeditiously.
What are time frames?
400
An advisor generally charges an hourly rate or a flat fee for services e.g.” financial plan” – the client would be responsible for implementing the plan
What is “Fee only”
400
Advisors successfully integrate both fee based and commission based structures into one practice- combining both models is essential for what types of advisors?
What is those advisors that sell insurance?
400
- Revenue by client - Revenue by product- last 5 years - Client retention rate - Staff hierarchy chart
What are parts of a comprehensive information package for buyers?
400
A large block of business may be sold to this so they could develop it to its full potential.
What is another firm with several advisors?
400
This on a wider range of issues such as timing, transition, continuity of staff and ongoing roles all contribute to achieving a successful outcome.
What is flexibility?
500
The fee you pay for buying or selling investments.
What is Commission
500
Signing a new letter of engagement with your client
What is, what you have to do once you make the transition to a fee based model.
500
-Financial performance, stability and viability -Client segmentation and age demographics Whether the business has a niche position, location and whether it has any inherent intellectual property, brand, or market position.
What are some factors of a Fair Market Value Assessment?
500
The most important factor for increasing business value prior to a sale.
What is a written business plan?
500
Consider whether your "blank" of the sales process are realistic. Check these with a professional.
What are realistic expectations?