How much is my financial advisory practice worth?

Most independent practices sell for somewhere between 2x and 4x annual revenue, with some strong recurring-fee books reaching closer to 6x. The number depends on client retention, how much revenue comes from ongoing fees versus one-off transactions, growth rate, and client age. Firms with a lot of clients already taking RMDs or an average client age above 70 often get discounted for succession risk.

Should I sell to an outside buyer or hand the practice to someone internally?

Internal succession has become the more common route. Roughly 71% of advisors with a documented plan choose to transition ownership to someone already at the firm, while fewer than 9% sell externally. Internal deals usually play out over three to fifteen years through gradual ownership transfers, rather than one lump-sum payout like most external sales.

When should I tell clients about my succession plan?

Most firms start those conversations 12 to 24 months before the transition actually happens. That gives clients time to build a relationship with the successor before the founder steps back. Introducing the successor gradually, through joint meetings and planning reviews instead of one big announcement, tends to protect client retention through the handoff.

How long does selling a financial advisory practice actually take?

The deal itself, from signed letter of intent to closing, typically takes 6 to 12 months. But getting the practice ready to sell for its full value takes much longer, often three to five years of work on documentation, revenue diversification, and reducing how dependent the business is on one person.

The Succession Gap: A Financial Advisor's Guide to Passing on the Practice

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The Succession Gap: A Financial Advisor's Guide to Passing on the Practice | Dunham