Ep 179: Investment Banking For Wealth Management And The Evolution Of Advisor Enterprise Value with Elizabeth Nesvold
Financial Advisor Success
Michael Kitces
4.8 • 696 Ratings
🗓️ 2 June 2020
⏱️ 109 minutes
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Summary
Elizabeth Nesvold is the Managing Director and Head of Asset & Wealth Management Investment Banking for Raymond James, providing investment banking services for some of the largest independent advisory firms engaging in capital transactions. Today she joins the show to discuss the evolution in wealth management firms over the decades and how an investment banker looks at the evaluation of an advisory firm.
Listen in as we talk in depth about how obtaining evaluation of your advisory firm can be a helpful tool in understanding whether your business is getting a good return on investment, as well as what Liz has learned as a founder selling her own firm. You will hear what investment bankers do for wealth management firms, the dynamics of raising capital when starting an advisory firm, and how Liz counsels other advisory firm founders getting ready to sell their businesses.
For show notes and more visit: https://www.kitces.com/179
Transcript
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| 0:00.0 | Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with |
| 0:07.2 | financial planner, speaker, and consultant Michael Kitsas to hear stories of how leading financial |
| 0:13.1 | advisors navigated the inevitable challenges that arise on the path to success and get insight |
| 0:18.7 | from leading industry consultants about how to break through to the |
| 0:22.1 | next level in your advisory business. And now here's your host, Michael Kitsis. Welcome, everyone. |
| 0:28.5 | Welcome to the 179th episode of the Financial Advisor Success podcast. My guest on today's |
| 0:34.1 | podcast is Elizabeth Nesfold. Elizabeth is the managing director and head of asset and wealth management investment |
| 0:39.5 | banking for Raymond James, which provides investment banking services for some of the |
| 0:43.7 | largest independent advisory firms engaging in capital transactions. |
| 0:47.9 | What's unique about Liz, though, is that she's covered wealth management as an investment |
| 0:51.7 | banker for more than 25 years now and has seen firsthand |
| 0:54.9 | how the valuation of wealth management firms have evolved over the decades to become what they |
| 0:59.5 | are today. In this episode, we talk in depth about how an investment banker looks at the valuation |
| 1:05.2 | of an advisory firm, the way that early on RAs were valued primarily by their assets under management, |
| 1:10.8 | how evolving |
| 1:11.5 | advisory fee models away from the traditional 1% AUM fee cause a shift for RAs to be valued |
| 1:16.6 | by their gross revenues instead. |
| 1:18.8 | The way further shifts in what advisory firms do and don't do to provide value for their |
| 1:23.3 | fees and the associated costs for those services have caused advisory firm valuations to shift |
| 1:28.3 | again to focus on multiples of free cash flow instead, and how obtaining a valuation of your |
| 1:33.3 | advisory firm can be a powerful tool to understand whether the business is really getting a good |
| 1:37.7 | business ROI on the resources it expends to service its clients. |
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