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Financial planner valuations

Financial planner valuations

Like professional practices, financial planners often have little or no productive tangible asset base. What they do often have however is a book of business. This intangible asset can be potentially valued in its own right and this can be a key area of dispute, see Nettler and Nettler (2007).

Another potentially contentious component of value is the market salary for the owner operator; see court cases Corbon & Klousner (2015) and Scott & Scott (2006).

Key financial planner valuation components include the type of service, the number of clients, average fee per client, the average client period, client demographics, service manager details, salaries and commissions paid to staff and location and terms of the leased premises.

Examples of financial planner valuation engagements include the valuation of a firm of independent financial planners providing financial planning, wealth management, retirement planning, self-managed super funds and insurance advice, report provided for restructuring purposes, and the quantification of the lost alternative investment opportunities due to negligent advice provided by a financial planner; report prepared for the Federal Court WA.