Most IFA firm owners have a number in their head. It usually comes from a conversation at a conference, a figure a friend mentioned, or a multiple they read about years ago. It is rarely based on how the market actually values firms today, and that gap can cost owners dearly at the negotiating table.
Understanding what genuinely drives valuation, before you start talking to buyers, puts you in a far stronger position when the conversations begin.
Client Demographics Matter More Than You ThinkFew things unwind a deal faster than a messy compliance file. Complaints history, file quality, suitability documentation, and your relationship with the regulator all get scrutinised closely during due diligence. Firms that treat compliance as a genuine discipline, rather than a box-ticking exercise, tend to move through the sale process with far fewer surprises.
Getting an Independent View
It is tempting to rely on informal benchmarks, but every firm has its own mix of strengths and risk factors that a generic multiple cannot capture. Getting a proper, independent valuation before you enter serious conversations gives you a realistic starting point and a much clearer sense of what would actually improve that number if you have time before you plan to sell.
Valuation is rarely just a calculation. It is a reflection of how resilient, well-run, and future-proof your business looks to someone stepping into your shoes. Understanding that early gives you the chance to shape the story before anyone else does.