The valuation in Wealth Firms isnโt just a number โ itโs a strategy.
Everyone in independent wealth management has heard the benchmarks: 6โ10x EBITDA, or 0.75โ1.5% of Assets under Management (AuM). However, in real-world M&A, these figures are just the headline. The real story is told in adjustments โ discounts or premiums โ based on quality, not quantity.
๐ซ Where value is lost
- Ageing client base ๐ป: If most clients are 70+, and thereโs no link to the next generation, a 20โ30% discount isnโt unusual.
- Client concentration ๐ป: One client driving 25โ30% of revenue? Itโs efficient until it isnโt โ and buyers notice.
- Cross-border exposure without structure ๐ป: Serving clients from emerging markets? Fine โ but not without clear KYC, compliant onboarding, and transparent fund origins.
- Founder dependency ๐ป: If the business is the founder, expect buyers to price in succession risk.
โ Where value is created
- Recurring revenues >70% ๐ข: Predictability is king.
- Operational scalability ๐ข: Tech-enabled, cost-efficient models attract higher multiples.
- Structured international business ๐ข: Global clients arenโt a risk if you manage them well, with process, transparency and regulation.
Why this matters
The Swiss wealth management market is heading towards consolidation with sophistication. Buyers are no longer just buying AuM โ theyโre buying systems, teams, compliance maturity and client longevity.
Understanding these valuation levers isnโt just for sellers. Itโs strategic intelligence for anyone shaping a firm’s futureโwhether through acquisition, succession, or transformation.
๐ฌ Whatโs the most overlooked value driver in our industry today?
Source: LinkedIn