Divorce and shareholder changes behind practice valuations
Radar Results has noted a decrease in requests for financial planning practice valuations, although the reasons behind getting a valuation have changed significantly since the global financial crisis (GFC).
The number of valuations conducted by Radar Results has fallen 31 per cent on 2010. However, the consultancy noted that the reasons for getting a valuation have changed, with the proportion of requests as a result of divorce and property settlements increasing dramatically. Radar Results noted that before the GFC, most valuations were for finance applications or for the lender to check on the equity-to-loan ratio – although few were for those reasons now, it added.
Changes to the shareholding between partners in a financial planning business were also now more prevalent reasons behind a valuation as younger partners sought to buy a larger stake in their planning business, Radar Results stated.
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