For May, the Economic Indicators Dashboard is showing all indicators within historical typical ranges. Learn more about one key indicator: Employment Growth.
Although assets under management and revenue typically get a lot of attention when describing advisory firms, from a valuation perspective, profitability is more important. Do you know the profitability of your firm – and strategies that can help improve it?
2013 was a great year for stocks, particularly in the U.S. So now may a great time prepare for conversations with clients about the strong year and level-set expectations for 2014. The Asset Class Dashboard can help reinforce your message with clients.
As the end of the year approaches, it would be wise to begin resetting performance expectations and to consider the power of mean reversion. It is unlikely that asset class performance will continue to fall outside of the normal range. Every year, advisors and their investors should plan for the most likely scenario and build a plan around it.
Whether advisors are looking to sell their firm or grow their business through a strategic acquisition, having a solid understanding of the drivers of valuation is critical. In our view, the common “2x last year’s revenue” approach is overly simplistic and risks disappointing both the potential buyer and the seller. We’ve identified three drivers of enterprise value to focus on instead.
The July 2013 reading of the Asset Class Dashboard is somewhat reminiscent of the May 2013 reading of the Dashboard when 12-month equity returns were on the high end of their historical typical range. One difference in July, however, is that bonds and Commodities were weaker than they had been in May, falling below their historical typical range.
The financial advisory industry is at a generational crossroads: the baby-boomer bulge is reflected in the age of many advisors – and that of their clients. However, most advisors overlook the impact that the age of their client book can have on their firm’s future growth of assets under management – and the value of their firm. What’s the connection between age and the value of a wealth management firm – and what can you do about it?