Todd Doherty, Vice President of Acquisitions & Legacy PlanningFollowing is the conversation that we had with the firm’s Vice President of acquisitions and legacy planning, Todd Doherty.
Why should a company choose you in their quest to achieve advantages in the Valuation Services space?
Our standard valuation service is ideal for advisors with an investment-centric practice with less than 40 percent of revenue generated from annuities and insurance. This service is a low flat rate of $1,295 and includes both an earnings and market approach to arrive at a calculation of value. This allows us to capture and communicate both the quality of the book of business and the operational efficiency of the practice. Most of our competitors only provide a market-based valuations at this price point, and charge over $3,000 or more for a similar deliverable.
The valuation report includes benchmarks so a practice can see how they are performing compared to peers in areas such as client segmentation, average AUM, staffing ratios, and profitability. With that, we provide insights on what drives value along with recommendations on what they can do to improve value. In 2023 we enhanced our valuation with the addition of our proprietary MaxVal PredictorTM tool, which helps advisors time their succession to maximize value and the monetization of equity. This tool specifically looks at one of the key drivers of value: client age. As clients near age 70, they began to draw down assets either through retirement or through assets leaving the practice as they are transferred upon death to heirs (who often are not clients). This decline in AUM naturally impacts revenue, making this a critical risk factor that is only mitigated by growth activities such as multi-generational planning and client acquisition. Many advisors who are later in their career tend to slow down or cease growth activities as they near their own retirement. For these advisors, the MaxVal PredictorTM is a vital tool for identifying the natural peak and decline of practice value in the absence of growth, and informing the timing of their practice sale.
Our valuations have been recognized by the Wealth Management Industry Awards and the Think Advisor Luminaries, and we have been named as one of the Top 10 Valuations Firms by Financial Services Review for 2023 and 2024. Our valuations are also preferred by many lenders and by our Enterprise Partners, due to the ease of data collection and the quality of the report and the coaching advisors receive.
In addition to our standard valuation service, we also offer advanced valuations for practices that exceed 40 percent of revenue from annuities and/or insurance. Our in-house CPA also provides specialty valuations for CPA/Accounting firms and for events such as divorce, legal disputes, and other situations where a valuation expert may be required to testify in court.
What are the challenges that you can overcome for your clients?
We assist advisors in addressing key challenges related to valuations and practice management:
1. Long-term Equity Management: We help advisors enhance efficiency and book quality by improving client segmentation, optimizing staff-to-client ratios, and leveraging valuations to drive staff ownership and growth activities. Strategies include reducing the number of clients and multi-generational planning.
2. Succession Planning: We aid in planning for succession that aligns with financial, personal, and professional goals. Using valuation data, we help advisors enhance value, prepare for external sales, and manage internal successions. Our support extends to negotiations, term sheet development, legal agreements, earnings modeling, and connecting with lender networks via our Advisor Legacy Sales platform.
3. Acquisition Evaluation: Our objective valuations guide price negotiations, ensuring clarity for both parties and helping demonstrate investment value to lenders. This fosters mutual understanding of value drivers and potential ROI.
Beyond valuations, we offer solutions for growing and scaling practices, including systems, processes, and coaching for capacity management, hiring, and growth. We also assist with ownership transitions, ensuring minimal staff and client attrition, and provide guidance for navigating changes and challenges, helping mitigate risks and adapt to evolving circumstances.
How is Advisor Legacy helping financial advisors build, live, and leave a legacy?
We help Financial Advisors build, live, and leave their legacy through our comprehensive Advisor Legacy process. This approach guides advisors in defining their values, shaping their practice, and planning their legacy.
Our tailored solutions include practice assessments, valuations, coaching, consulting, M&A support, and succession planning, ensuring advisors receive personalized strategies at pivotal career moments.
Our in-house CPA also provides specialty valuations for CPA/Accounting firms and for events such as divorce, legal disputes, and other situations where a valuation expert may be required to testify in court.
By fostering meaningful partnerships, we address advisors' unique needs, enabling growth and improved quality of life. Whether helping advisors at their career's peak or supporting successors in continuing the legacy, our team is committed to being a trusted, long-term partner, delivering actionable insights and empowering advisors to achieve their goals.
How does your company provide true understanding, strategy, and guidance helping financial advisors build and transition their legacy?
We help advisors across The Advisor CurveTM break through hurdles by providing timely services to fit their unique needs - and only what they need. No bloated contracts or long-term commitments that outlive their value. From starting their career as an associate or solo advisor, all the way through to their succession, we provide strategic consulting and coaching paired with proven processes and tactics to turn strategy and "good ideas" into consistent, repeatable action. This is made possible by the deep expertise of our team, which consists of ex-financial advisors, broker dealer executives, and other experts from financial services and other fields.
Our expertise includes intimate knowledge not only of the financial advisor industry, but of the inner workings of each Broker Dealer and Custodian engaged in our Enterprise Partner program. This allows us to speak the language, provide advice in-line with how each platform operates, and help advisors leverage the full scope of resources and tools available to them.
Do you have any specific case study on how you have enabled clients to overcome hurdles and attain desired outcomes? Please elaborate.
A solo advisor secured a valuation under the assumption she would retire in 4 years. Our MaxVal Predictor™ analysis indicated that the existing client group, based on client age, would start to see a decline in assets, revenue and value in as little as one year. This would start a rapid decline in value and potential monetization for the advisor 3 years ahead of her projected retirement date.
To mitigate the decline in value and ensure additional practice growth would require that the advisor invest in building a next level structure and hiring an assistant and/or Para-Planner to support additional clients. As the advisor was near retirement, she wasn’t inclined to invest in growth and decided to move up her timeline and begin planning her succession for that year. Based on that decision, we were able to transition the advisor to our Succession Support team and guide her toward a profitable and successful practice sale and early retirement.
Any other interesting insight you would like us to talk about in the story that we may have missed in this questionnaire?
We are a relationship-centric firm and take a collaborative and consultative approach with our advisors and industry partners. One thing we pride ourselves on is our industry partnerships and focus on education. Through our Enterprise Partner program, we develop deep working relationships with leaders and consultants in various departments at broker dealers and custodians. This approach also lets us expand our understanding of their specific policies, procedures, reports, and tools so we can tailor our services to operate in alignment with the requirements of the BD or custodian. This relationship allows us to gain inside knowledge to make our services better and easier for advisors which allows us to offer advisors at partner firms a special partner rate on our practice valuations. We also work closely with our partners to deliver webinars, in-person events, and other educational programming on key topics of importance to the advisor and the firm.
In 2025, we will celebrate 20 years of service to the industry. We have also been named as one of the Best Places to Work three times by Crain’s Detroit Business. This award is especially significant as it is based on participation and responses by our team members, and reflects the commitment and investment we have made in our people and our culture.
