TD Ameritrade to offer DIY valuation tool
Program aimed at helping advisers come up with a ballpark figure on what their firms are worth; many 'flying blind'
TD Ameritrade plans to release an online tool called Valuation Analyzer that’s aimed at helping advisers better understand what their practices are worth.
“Advisers always say that they have this asset, but they have no idea what it’s actually worth,” said Mike Watson, director of practice management for TD Ameritrade Inc. “This tool’s not available anywhere. Advisers don’t know if they’re ready to sell their business. They’re flying blind.”
The tool, set to be unveiled Tuesday, allows advisers to answer a number of questions about their practices to determine the value of their firms. The tool also features a to-do checklist that could help bolster a firm’s value.
Typically, an outside valuation of an adviser firm’s worth costs up to $20,000. Advisers who custody their assets through TD Ameritrade will pay nothing for the assessment.
TD Ameritrade partnered with Echelon Partners LLC, an investment-banking boutique that created the tool. Daniel B. Seivert, its chief executive and managing partner, cautioned that the tool won’t replace a full valuation if advisers are thinking of selling their firms.
“This gives them a general estimate,” he said. “It helps you getting into the ballpark. A professional valuation is usually required if you’re making a deal and if you want to take it to the next step.”
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