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Price to pay for practice

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Aug 27, 2009 9:51 pm

A couple of questions for those of you who are more experienced than I when it comes to purchasing a practice. 

  I have heard before 1xGDC for commissions, and 2xGDC for recurring revenue.   Is this accurate in current climate?   Generally speaking, are trails counted as recurring revenue, or just advisory accounts?    Does the old advisor typically stay around?  Does he get paid additional $$ during that time or is that already priced into the sale price?   I know there are many different situations and many factors to consider, but I am going to discuss a purchase with an advisor who is trying to get out of the business for health reasons, and I wanted to have some idea of how that might work.     Thanks.