If advisors want to add value, then they should know their own valuations, according to the founder of a fast-growing fintech firm.
In the future, the business of evaluating businesses will likely require some blend of both technology and the savvy of financial advisors, says Michael Carter, CEO and president of tech firm BizEquity.
“Where the business owner market once represented 10 to 15 percent of advisors’ book of business, moving forward it will be 20 to 25 percent,” says Carter. “The number one target for advisors, wealth managers and insurance representatives is getting more business owners in as clients.
“Technology gives them tools to prospect for, engage, serve and retain them as clients,” he says.
Based in Wayne, Pa., BizEquity is a cloud-based business valuation platform. The company has established partnerships to offer its tools to insurance companies, independent advisors, other fintech platforms and diversified financial firms. Via its partnerships and direct business with owners and partners, BizEquity has provided valuations for more than 33 million businesses so far.
After founding the company in 2011, Carter initially courted financial firms as primary clients, but then he found greater success appealing directly to business owners and client-facing advisors.
More than 1,200 advisors now use the offering to evaluate the businesses of their clients, their prospects and themselves. Moving forward, Carter pictures the advisory channel as a continuing source of growth for BizEquity. To that end, he has created a goal of reaching 30,000 advisors within the next four years.
“We’re going beyond offering advisors a key piece of information that they need to serve their clients,” says Carter. “We’re going to use valuations to help them prospect smarter and gain insight about potential new clients and to help them make better recommendations and retain the clients they already have.”
BizEquity offers valuations for any size business using a cloud-based, big data-driven system that delivers results in minutes. More than two dozen performance indicators are tracked by BizEquity, including cash flow to revenue, debt to income, income to revenue and return on equity.
Many financial industry and technology executives note that independent advisors often have difficulty ascertaining their own firm’s value—yet many of their clients are business owners whose own retirement plans involve an eventual transition and liquidity event.