Brand quality, people and systems will determine the value of IFA firms rather than assets under management, according to Informed Choice chief executive Nick Bamford.
At the Personal Finance Society annual conference in London last week, Bamford said these factors will be increasingly attractive to buyers.
He said: “In the future, do not expect firms to be bought as multiples of assets under management. Brand, people and systems and processes will have a far more significant influence on a firm’s value in the eyes of a buyer.”
Bamford said firms need to build their brand through their actions. He said: “Firms need to build a strong brand. Your brand is not what your badge says, it is what you do. Every single business owner has the capacity to build a strong brand.”
He said it is essential for firms to employ the right people to help build their brand and add value to the business.
He said: “Employ people who are better than you, so your business value grows. You need team-oriented people who are emotionally secure, so their egos are under control, highly teachable, service-oriented and creative, so they will try to find ways of doing things better.
“It is also important to have robust systems and processes in place that drive efficiency and drive out risk. Most important, everybody in your firm needs to know what they should be doing.”