RJ and Makay

For the owners of privately held financial services and advisory firms, 2010 was a seller's market all the way with a 50:1 buyer-to-seller ratio. But even that didn't keep overall practice values from dropping off 2009's historic high.

According to FP Transitions, a provider of equity management, valuation, and succession planning for the financial services industry, the average multiple of trailing twelve-month recurring gross revenue paid for independent financial services firms reached a ten-year peak of 2.34 in 2009 and then fell to 2.31 in 2010. “This is a major event,” says FP Transitions CEO David Grau, Sr., JD. “Since the formation of our company more than a decade ago, the industry has been asking how much higher prices would go given the imbalance of buyers and sellers.”