What's my book worth?

[quote=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.

[/quote]

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

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?

[quote=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?

[/quote]

"Dollarize"?

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

OK,

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

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.

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

Here's a calculator...

http://www.fptransitions.com/

Thank You Indyone.

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

[quote=a12345]Any other ideas of how to calculate the cash value of a "book"? [/quote]

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.

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. 

[quote=Dirk Diggler]

[quote=a12345]Any other ideas of how to calculate the cash value of a "book"? [/quote]

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.

[/quote]

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

[quote=joedabrkr][quote=Dirk Diggler]

[quote=a12345]Any other ideas of how to calculate the cash value of a "book"? [/quote]

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.

[/quote]

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

[/quote]

Goodie! Joe finally approves of my "case."

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

[quote=Dirk Diggler][quote=joedabrkr][quote=Dirk Diggler]

[quote=a12345]Any other ideas of how to calculate the cash value of a "book"? [/quote]

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.

[/quote]

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

[/quote]

Goodie! Joe finally approves of my "case."

[/quote]

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.

[quote=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

[/quote]

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?

[quote=joedabrkr][quote=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

[/quote]

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?

[/quote]

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

[quote=Dirk Diggler][quote=joedabrkr][quote=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

[/quote]

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?

[/quote]

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

[/quote]

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....

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.

[quote=Dirk Diggler]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. [/quote]

Damn yer a crafty bastard.  I'm gonna have to quit smoking, eating steak and fried foods....

Wouldn't it be easier for ya to buy a par whole life policy on me?  You know that's the lowest cost form of insurance over the long term...and it has all those great non-forfeiture options.....

[quote=joedabrkr]

[quote=Dirk Diggler]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. [/quote]

Damn yer a crafty bastard.  I'm gonna have to quit smoking, eating steak and fried foods....

Wouldn't it be easier for ya to buy a par whole life policy on me?  You know that's the lowest cost form of insurance over the long term...and it has all those great non-forfeiture options.....

[/quote]

Nah...I'm not that interested in buying this guys cocktail napkin...errr... I mean "book."

Man, you two meathheads are worthless. Why do you even bother posting to the boards?

[quote=FinanceDude]Man, you two meathheads are worthless. Why do you even bother posting to the boards?[/quote]

Hey thanks for sharing.  How's that selling your book thing going anyway?  Get any offers yet?

I’ll give $250,… if it’s managed money.  

Financedude,

You may not deserve the abuse that you are getting, but the book really has almost no value.  Here's why:

1)The only potential purchasers are people with your B/D. 

2)If 100% of the clients stayed with the new rep, the income from these clients would only be $20,000 (assuming 40% payout.)

3)The best clients have a high likelihood of leaving.  If you leave, there is no reason for the client to stay.  They chose to do business with you.  They don't care about your B/D or the new broker.

4)Therefore, all that is left is a bunch of crappy clients bringing in $10,000 year.  The problem is that there is an obligation to service these people.  A decent rep would be better off forgoing this income and spending his time prospecting for new business.    An unsuccessful rep doesn't have any money to give to you.  Thus, your book is worthless. 

[quote=exEJIR]I'll give $250,... if it's managed money.   [/quote]

I'll bid $255 and throw in a free set of steak knives.

[quote=joedabrkr]

[quote=exEJIR]I'll give $250,... if it's managed money.   [/quote]

I'll bid $255 and throw in a free set of steak knives.

[/quote]

If you call (sell it) in the next 15 mins,... I'll give you $275,

but wait there's more...  we'll double your free set of steak knives.

That's an amazing $275 & TWO free sets of steak knives for the astonishing low price of your book (read: pamphlet)!!!!    

FD

Sorry to poke fun, but a $5MM book from a rookie is just not worth much money. (as previous posts have pointed out)  You haven't worked with them long enough for them to trust you, to allow you to make a recommendation about them sticking with a particular broker. 

If you have someone you trust and like at your firm, transition them over to him/her.