Business valuation examined in Advisor’s Edge

By Steven Lamb | March 9, 2005 | Last updated on March 9, 2005
2 min read

(March 9, 2005) With one-third of Canadians owning their own business, odds are most financial advisors have an entrepreneurial client or two. Whether they plan on leaving the business to junior, or selling it to a third party, sooner or later they will need a succession plan.

The fact is, determining the proper value of your client’s business is a highly specialized field with its own professional designation. Like financial planning — or dentistry for that matter — it should be left to the professionals.

“It’s its own field, with Chartered Business Valuators as a special designation — it’s a very specific niche,” says Deanne Gage, managing editor of Advisor’s Edge.

“Our March cover story, Perfect Combination, deals with how to work with business valuators and how you should have that particular centre of influence as part of your business,” she says. “A lot of advisors may try to figure out, based on their own estimation, what a business owner should try to get for their business, but really it’s beyond their realm of expertise.:

This month’s Advisor’s Edge also features an article dealing with one potential source of tension within the office.

“We have a story on the branch manager/advisor relationship, how it can be a good thing or a not-so-good thing and how you can improve that relationship as an advisor and utilize your branch manager to the best of their ability,” Gage explains.

The story includes advice on how to work through conflict between managers and advisors. It also outlines the role of the branch manager.

“They are often deemed ‘the bad guy’ — it’s not because they’re jerks, it’s because they have a certain role and compliance is part of that role,” says Gage.

Classic Correspondence deals with customizing letters to clients, which are too often simply form letters.

“They tend to be very formulaic — just change the names and it’s pretty much the same,” says Gage. “A lot of the top advisors do not use form letters at all. They try to craft unique letters throughout their practice.”

Some tips include handwriting the envelope, rather using printed address labels, or including personalized greetings that show you are in touch with your client as a human being with interests beyond finance.

Also in the March issue, columnist Ellen Bessner warns advisors who are leaving their firm to not try and sneak a few clients out the door with them, outlining the potential legal consequences.

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Steven Lamb