News, Vision & Voice for the Advisory Community


Mark Hurley takes on Bob Veres in round two of the valuation debate

Veres 'fanned the flames' but didn't account for certain key points, like the rising cost of labor and the expense of winning new clients, says Hurley

Author Mark Hurley, Guest columnist March 23, 2011 at 2:00 PM
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Mark Hurley: Wealth management firm operating margins are under assault from accelerating non-owner compensation, the single largest cost in the wealth manager economic model.

Mark Hurley


Bob Veres

Bill Winterberg

Bill Winterberg

March 23, 2011 — 3:21 PM

I’m passionate that the “diagnosis function” to which Hurley references falls under the 80/20 rule.

I believe 80% of a client’s diagnosis can be accomplished through scalable technology. Plug in a client’s AGI, net savings, household characteristics (e.g. number of children and ages), portfolio, and other data obtained in the intake process, and technology can generate a snapshot of the client’s greatest financial planning needs.

It’s the remaining 20%, the behavior about money, or money scripts in the life planning environment, that requires time-intensive processes.

Would all 25 clients who wish to sign on at once have complex money scripts? Or would the majority benefit from a turnkey intake->snapshot process, while the remaining minority would need counseling to correct dysfunctional money scripts?

Bill @ <a href="http://fppad.com" rel="nofollow">FPPad.com</a>

Bob Kargenian

Bob Kargenian

March 23, 2011 — 11:48 PM

Hey, Brooke. Hope all is well. I have tried emailing certain articles to friends, and the email function does not appear to be working. When I hit Send, nothing happens. Are your tech people aware of this. My phone is 714-704-9180.

Josh Patrick

Josh Patrick

August 8, 2011 — 11:15 PM

I don’t know many businesses from any industry where the owner is paid more for their business than if they held on to it. When one decides to sell a business, it’s usually not because they can get more money by selling than holding on. There are some exceptions to this rule, but it always happens when a buyer is not buying on either a strategic or financial basis. In those cases, owners hit the proverbial “jackpot”.

I also agree that wealth management firms only achieve enterprise value when they have over $2MM in sales and operate in a truly ensemble manner. The question for many in the wealth management/financial planning/investment management business is do they want to create a business that develops enterprise value. The answer to that in most cases seems to be no.

Josh Patrick

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August 18, 2023 at 3:56 AM

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November 22, 2018 at 12:07 AM

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