Wealth Management and RIA Valuation
29 valuation methods · 43 industries · Results in under 10 minutes
In short
A registered investment adviser is valued on its recurring fees: client assets rolled forward by retention, market growth and new assets, turned into fees and cash flow, and read through a discounted cash flow and a multiple of projected EBITDA checked against a share of client assets.
Who this is for
Founders and partners of registered investment advisers and wealth management firms planning a sale, a partner buyout or succession, and buyers who need client assets, retention and organic growth read with the earnings.
How is a registered investment adviser valued?
VA values an advisory firm on its recurring fees. Client assets are rolled forward each year: the share that stays, market growth on what stays, and new assets won. Fees, EBITDA and cash flow follow, and the model reads them two ways: a discounted cash flow, and a multiple of the EBITDA it projects for year three, set by organic growth and retention and checked against a share of client assets. The two are blended, with more weight on the cash flow when commission revenue is a large part of the business. In a full report this reading carries the most weight, with a discounted cash flow, comparable companies and precedent transactions alongside. This tool is informational only. Output is driven by your inputs and does not constitute a formal appraisal or certified valuation.
What drives the value of a registered investment adviser?
- Client assets under management, and how much of them are billed on fees
- Client retention: the share of assets that stays each year
- Organic growth: new assets won from new and existing clients, separate from market moves
- The average fee, and whether it is holding
- Advisers who stay, and clients whose relationship is with the firm rather than one founder
- EBITDA margin after paying every adviser, founders included, at market
What lowers the value of a registered investment adviser?
- Clients tied to one founder adviser
- Assets that grew with the market but not through new clients
- Fees drifting down
- A commission-heavy book
How much is a registered investment adviser worth? A worked example
An advisory firm, on its fees
Take an advisory firm with $400 M of client assets at a 1% average fee, $4 M of revenue and a 30% EBITDA margin. VA's RIA model keeps 95% of client assets each year, lets markets add 6% a year to what stays and adds 6% a year in new assets, then projects five years of fees and cash flow and discounts them at 18%, the lowest rate VA uses for a firm this size, with 2.5% growth after year five: about $7.18 M. It also applies 8× to the $1.46 M of EBITDA it projects for year three, $11.7 M, and checks it against 3.2% of today's client assets, $12.8 M; weighted 85% and 15%, the multiple view reads about $11.8 M. Weighted 45% to the cash flow and 55% to the multiples, the firm is worth about $9.74 M. If only 90% of client assets stay each year, the multiple drops to 7× and the value to about $7.62 M. In a full report, this reading carries the most weight, with a discounted cash flow, comparable companies and precedent transactions alongside.
Illustrative figures from the industry model alone. A full report blends it with a discounted cash flow, comparable companies and precedent transactions.
Value your registered investment adviser in under 10 minutes
- 1.Upload your financial statements, or type the figures in.
- 2.Confirm the add-backs and the industry details the model asks for.
- 3.Get a valuation range, the methods behind it and a PDF memorandum.
Which numbers matter most?
Assets under management
Client assets the firm manages and bills on. Fees follow them, so they are where the model starts.
Client asset retention
The share of client assets that stays each year. It sets both the growth the model projects and the band of multiples it applies.
Organic growth
New assets won from new and existing clients each year, apart from market moves. Buyers pay for it; market gains they treat as luck.
Average fee
Fee revenue as a share of client assets. Falling fees shrink revenue even when assets hold.
Fee-based revenue share
The part of revenue billed as recurring fees rather than commissions. A commission-heavy book gets a lower multiple and more weight on the cash flow.
What do you need to value a registered investment adviser?
- Profit and loss statements and balance sheets, ideally for the last three years
- Figures for the current year to date
- A list of add-backs: the owner's pay and perks, and any one-off costs
- Loan and lease balances
- Client assets by household, with fees and tenure
- Asset flows: new assets, withdrawals and market change by year
- Adviser roster, compensation and agreements
Example scenarios
Clients who leave with a retiring adviser
A founder retires and some clients follow them out. Lower retention cuts both the growth and the multiple, and the worked example shows what that does to the value.
Growth that is really the market
Assets rose last year, mostly because markets did. The model separates market growth from new assets won and gives credit in the multiple only for the second.
Further reading
Business Valuation Methods Explained: DCF vs. Comps vs. Precedent Transactions
The five business valuation methods professionals actually use (DCF, comparable companies, precedent transactions, SDE/EBITDA multiples, and asset-based), when each wins, and how they combine into one defensible number.
WACC Explained: Why Your Discount Rate Can Make or Break a Valuation
WACC is one of the most misunderstood terms in business valuation. Here's what it is, why it matters, and how it directly affects what your business is worth.
DCF Analysis Explained for Private Companies
A clear, practical guide to discounted cash flow analysis for private companies. Learn the five key steps, how to estimate WACC without public market data, terminal value approaches, and common pitfalls to avoid.
Frequently asked questions
How is an RIA valued?
On its recurring fees. VA rolls client assets forward, projects fees and cash flow, and reads them through a discounted cash flow and a multiple of projected EBITDA checked against a share of client assets. In a full report this reading carries the most weight.
Is an RIA valued as a percentage of assets under management?
Only as a check. The multiple of EBITDA carries the multiple view, and a share of client assets takes a small part of it, because two firms with the same assets can earn very different fees and margins.
Why does organic growth matter more than asset growth?
Because market gains reverse and cannot be managed. The model credits organic growth, new assets won, in the multiple, while market growth only moves the projection.
What if my revenue is mostly commissions?
Commission revenue does not recur the way fees do. Below a fee-based threshold, the model lowers the multiple and puts more weight on the cash flow.
How are founder advisers treated?
Their pay should be set at what it would cost to replace their work, so the margin reflects the business a buyer takes over. Buyers also check whether clients stay with the firm when a founder steps back.
Is this a certified appraisal?
No. This is an informational estimate. A bank loan, a partner buyout or an estate matter may require a certified business appraisal, which this does not replace.
Terms used on this page
- Recurring revenue
- Revenue that repeats without a new sale, such as maintenance agreements, service plans or contracts customers renew.
- Valuation multiple
- The number earnings are multiplied by to reach a value. It rises with how durable the earnings are and how easily a new owner can keep them.
- Discounted cash flow (DCF)
- A valuation that projects the cash a business will generate over the coming years and discounts it to today at a rate that reflects the risk of receiving it.
- Discount rate
- The yearly return a buyer requires for the risk of owning the business. A higher rate lowers what future cash is worth today.
- Precedent transactions
- A method that values a business at the multiples paid in past sales of similar companies.
As featured in
Value your registered investment adviser
Get a valuation range with the methods behind it and a PDF memorandum in under 10 minutes.
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Last reviewed September 26, 2026 against VA's valuation models.