Step 1
What is the number for?
A value for an internal transfer to a partner answers a different question than a buyer’s offer in an outside sale. Before you trust any number, pin down four things: its purpose, its assumptions, its scope and its date. Then ask whether it covers the whole business, an ownership stake, or only some of the relationships.
Succession Resource Group’s valuation guidance shows how much buyer assumptions and expected cash flows move the result. So ask whoever gives you a number two questions: what did you assume, and what evidence would change it?
Step 2
Look underneath the revenue.
AUM tells a buyer how much money you oversee. It doesn’t tell them what it costs to serve, or who stays.
| Factor | Evidence to examine | Why it matters |
|---|---|---|
| Revenue durability | Recurring and one-time sources, fee changes, client withdrawals | Last year’s revenue may not describe next year’s. |
| Cost to serve | Staff, technology, service commitments, replacing your work | Revenue has to pay for the service you promised. |
| Concentration | Reliance on particular clients, employees or referral sources | A few departures can have a large effect. |
| Transferability | Documented relationships, team involvement, client communication | The practice may rely on you more than its records suggest. |
| Growth | Market effects, new relationships, contributions and attrition | Market gains are not the same as business development. |
Treat these as diligence questions, not a scoring system. A good answer on one factor does not justify adding a fixed percentage to the value.
Step 3
Same revenue. Very different practice.
Take two fictional practices, each bringing in $600,000 a year. Practice A spends $250,000 on delivery and overhead, and replacing the owner’s work would cost $120,000. Practice B spends $320,000, and replacing the owner would cost $150,000.
Same $600,000 of revenue. Fictional figures.
| Illustrative annual figures | Practice A | Practice B |
|---|---|---|
| Revenue | $600,000 | $600,000 |
| Delivery and overhead costs | −$250,000 | −$320,000 |
| Replacement cost of owner work | −$120,000 | −$150,000 |
| Remaining amount before other items | $230,000 | $130,000 |
These invented figures demonstrate cost sensitivity only. The remaining amount is not a formal EBITDA calculation, valuation, sale price, or estimate of your practice’s results. Other adjustments and transaction-specific costs may apply.
That is why comparing practices on revenue alone can miss the economics that matter. The example does not tell you what multiple either business should receive.
Step 4
Value, price and proceeds are three different numbers.
An opinion, under stated assumptions.
What a buyer proposes to pay, and how.
What actually reaches you after structure, debt, costs and taxes.
All three can differ even when everyone quotes the same headline figure. Ask for a written bridge from the number you were shown to the payments being proposed. Review contingent payments, seller financing, retained equity and compensation one at a time.
Never count the maximum possible payout as retirement money you already have.
Before anyone puts a number on it
Six things to have ready.
Valuation preparation worksheet
Check what you have prepared. Add practice-level notes only; do not enter client names or confidential information. Nothing is sent or saved. Reloading clears your answers.
Valuation questions worth asking
Is AUM enough to estimate practice value?
No. AUM does not describe fees, costs, concentration, relationship durability, or the work required to serve clients. It can be useful context, but it is not a complete valuation.
Should I use an online valuation calculator?
A calculator can illustrate assumptions if it makes them transparent. It should not be treated as a market quote or independent appraisal. This hub deliberately avoids assigning a sale value from a few inputs.
Why might buyers disagree?
Buyers can have different cost structures, operating plans, risk assessments, and proposed terms. Ask each to explain the assumptions and payment conditions behind the indication.
Sources & scope
Morrowgate Private Wealth · October 23, 2026. These resources provide background; they do not endorse Morrowgate or establish the terms of any arrangement.
Worksheets, examples, and discussion prompts are educational preparation aids. Apply the requirements relevant to your business model with your firm and independent advisers.
Before you trust a number
Talk through what is behind it.
One private conversation about your practice, your priorities and what drives its value. This is not an appraisal; if you need one, we will tell you. Keep in mind that Morrowgate could be a buyer. That is exactly why we will never pretend this conversation is an appraisal.
Pressure-test my valuation →Published by Morrowgate Private Wealth. Editorial standards. Educational preparation, not an appraisal or transaction advice.