FP Transitions' free tool puts a number on an RIA's exit math
A free 1-to-100 score from FP Transitions gives RIA owners a rough read on sale value — and a reminder that buyers now pay for profit potential, not AUM size.
FP Transitions has built a free tool for the question every RIA owner eventually asks: What is my firm worth? The valuation consultancy's Estimated Value Index, released this week, scores a practice from 1 to 100 using revenue, AUM, ownership structure and similar inputs. The closer a firm lands to 100, the better its chance of fetching a strong price in a sale. Financial Planning first reported the launch.
Bueermann describes the index as a "relative indicator," not a verdict. A firm scoring 98 is "a lot closer" to an 18-times-EBITDA deal than one scoring 72, he said, but no score guarantees any specific multiple. EBITDA remains the most common starting point for RIA valuations, even as tales of 20-times deals circulate. Valuation experts tend to caution that such multiples are rare.
The tool's diagnostic side gives the number its weight. It shows owners what drags their valuation down and what steps could improve it — simplifying business models, changing how advisors are paid, reconsidering fee schedules. For a typical owner, that turns a free score into a pre-sale to-do list.
AUM no longer sets the price
Bueermann's own examples show why the index exists. He cites a firm with $200 million in AUM that sold for $10 million, and an $800 million-AUM firm that went for "not a whole lot more than that." The gap is not size but profitability and growth potential. There was a time, he said, when firms' sales prices marched more or less in lockstep with their AUM totals. Today's buyers are far more intent on gauging a target's potential for turning profits.
That shift carries direct consequences for owners preparing an internal succession or an external sale. An $800 million firm with flat revenue may command a smaller check than a $200 million practice with rising advisory fees and a clean owner-compensation structure. The free score tells an owner which bucket they are in — and what to change before inviting a buyer to look closer.
The broader market keeps the question urgent. M&A activity in wealth management continues at a heavy pace, the industry's dealmakers say, and the gap between what sellers expect and what buyers will pay has never been harder to measure. The index is an approximate gauge, but it forces a useful exercise: name the attributes that matter, then answer honestly which ones your firm has.
The score is the hook; the diagnosis is the work. An owner who treats the free number as the end of the conversation will find the market teaching the same lesson again — the price follows the firm a seller builds, not the one they wish they had.