What's my book worth?

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Jan 28, 2006 6:59 pm

As an independent contractor
working for a private firm; I have the right to all my clients and their
assets, the right to leave my current firm, to branch out, or to go independent.
What is my book worth? Is it a percentage of assets? Does it depend on the amount
of clients? How in general do you calculate the worth of a
"book"?

In this example let’s use 50 clients 5mil under management.

I would appreciate all input.

Jan 28, 2006 7:04 pm
a12345:

As an independent contractor working for a private firm; I have the right to all my clients and their assets, the right to leave my current firm, to branch out, or to go independent. What is my book worth? Is it a percentage of assets? Does it depend on the amount of clients? How in general do you calculate the worth of a "book"?
In this example let’s use 50 clients 5mil under management.
I would appreciate all input.



You don't have a book. You have a pamphlet!

Jan 28, 2006 7:07 pm

Thanks alot! :-)
But this "pamphlet" of mine, what's it worth?
Or in general, how do you dollarize what any book would/should be worth?

Jan 28, 2006 7:31 pm
a12345:

Thanks alot! :-)
But this "pamphlet" of mine, what's it worth?
Or in general, how do you dollarize what any book would/should be worth?


"Dollarize"?


How about..."what is the actual cash value of my book of business"?


Jan 28, 2006 7:37 pm

OK,

What is the actual cash value of my book of business?
And how do I calculate it?

Jan 28, 2006 8:42 pm

5 Mil., If it's fee based averaging 1% you'll get $50-75K (assuming they stay around for term of agreement 3-5 years usually paid 25% upfront, 25% after 1 year and balance over term).


5 Mil. in commissioned assets you'd be lucky to pick up 10K.


This is what I have seen from people I know buying/selling.  Usually someone buys a practice, 50 mil+, in this case your looking for an advisor who maybe just switched to indy or recently relocated etc... They need a boost.


Jan 28, 2006 9:33 pm

= (AUM x 1.00%) / (1-.375) + .002876 / .125% * (1-.75)/.20250 - ROI

Jan 28, 2006 10:23 pm

Here's a calculator...


http://www.fptransitions.com/

Jan 28, 2006 10:26 pm

Thank You Indyone.

Jan 31, 2006 12:14 am

Any other ideas of how to calculate the cash value of a "book"?

Jan 31, 2006 8:18 am
a12345:

Any other ideas of how to calculate the cash value of a "book"?



Dude. Noone is going to buy your "book." A successful real estate investor would not spend his time worrying about how to squeeze another $5,000 out of his failure. Pull  yourself up by the bootstraps and get on with the rest of your life.


You're the one who decided to quit before the miracle. The one's who inherit your "book" are the one's who stuck around for the miracle.

Jan 31, 2006 8:19 am

Forget the formulas.  The value is what someone is willing to pay for it.  If this is commissioned business, it is worthless.  Even if it is fee based, it is still relatively worthless.  There is a responsibility to service the business and it's simply not financially worthwhile to service a bunch of low end clients. 

Jan 31, 2006 10:59 am
Dirk Diggler:
a12345:

Any other ideas of how to calculate the cash value of a "book"?



Dude. Noone is going to buy your "book." A successful real estate investor would not spend his time worrying about how to squeeze another $5,000 out of his failure. Pull  yourself up by the bootstraps and get on with the rest of your life.


You're the one who decided to quit before the miracle. The one's who inherit your "book" are the one's who stuck around for the miracle.



Hard words perhaps but in this case Dirk is absolutely right on all counts!

Jan 31, 2006 11:14 am
joedabrkr:
Dirk Diggler:
a12345:

Any other ideas of how to calculate the cash value of a "book"?



Dude. Noone is going to buy your "book." A successful real estate investor would not spend his time worrying about how to squeeze another $5,000 out of his failure. Pull  yourself up by the bootstraps and get on with the rest of your life.


You're the one who decided to quit before the miracle. The one's who inherit your "book" are the one's who stuck around for the miracle.



Hard words perhaps but in this case Dirk is absolutely right on all counts!




Goodie! Joe finally approves of my "case."

Jan 31, 2006 10:34 pm

I think you guys are confusing me with a12345.  We are 2 different people.


My question is the same as this guy's, based on my thread.  How do you value something like $5 million wrapped with a weighted average of 1.0%?  In my case, it's cleary nothing great, but I just wanted to leave with a few bucks in my hand and/or later.


Thanks.


FD


Jan 31, 2006 11:14 pm
Dirk Diggler:
joedabrkr:
Dirk Diggler:
a12345:

Any other ideas of how to calculate the cash value of a "book"?



Dude. Noone is going to buy your "book." A successful real estate investor would not spend his time worrying about how to squeeze another $5,000 out of his failure. Pull  yourself up by the bootstraps and get on with the rest of your life.


You're the one who decided to quit before the miracle. The one's who inherit your "book" are the one's who stuck around for the miracle.



Hard words perhaps but in this case Dirk is absolutely right on all counts!




Goodie! Joe finally approves of my "case."



Oh dude, you were not seeking my approval, nor was I looking to grant you my 'blessing'.  I hope we're past that.  Simply enough, you hit the nail right on the head, so why should I regurgitate things in my own words when you already had it right on?


'nuf said.

Jan 31, 2006 11:15 pm
FinanceDude:

I think you guys are confusing me with a12345.  We are 2 different people.


My question is the same as this guy's, based on my thread.  How do you value something like $5 million wrapped with a weighted average of 1.0%?  In my case, it's cleary nothing great, but I just wanted to leave with a few bucks in my hand and/or later.


Thanks.


FD




Ok....I'll give ya 200 bucks cash on the barrelhead....!  Let's have an auction right now....you'll see what the market will bear.


Anyone else?

Jan 31, 2006 11:20 pm
joedabrkr:
FinanceDude:

I think you guys are confusing me with a12345.  We are 2 different people.


My question is the same as this guy's, based on my thread.  How do you value something like $5 million wrapped with a weighted average of 1.0%?  In my case, it's cleary nothing great, but I just wanted to leave with a few bucks in my hand and/or later.


Thanks.


FD




Ok....I'll give ya 200 bucks cash on the barrelhead....!  Let's have an auction right now....you'll see what the market will bear.


Anyone else?



If Joe dies, I'll give you $150.

Jan 31, 2006 11:25 pm
Dirk Diggler:
joedabrkr:
FinanceDude:

I think you guys are confusing me with a12345.  We are 2 different people.


My question is the same as this guy's, based on my thread.  How do you value something like $5 million wrapped with a weighted average of 1.0%?  In my case, it's cleary nothing great, but I just wanted to leave with a few bucks in my hand and/or later.


Thanks.


FD




Ok....I'll give ya 200 bucks cash on the barrelhead....!  Let's have an auction right now....you'll see what the market will bear.


Anyone else?



If Joe dies, I'll give you $150.



Dude you're supposed to bid it up, not down.  Man keep it up and we're gonna get you a seat on the hockey helmet short bus....

Jan 31, 2006 11:28 pm

I'm just trying to get the second highest bid. I don't want to get filled at $200. If you die,  you bid gets pulled and I get filled at $150, which is still high, but I'm in a generous mood.