How advisors are rethinking growth by building smarter, more scalable firms.
Enterprise value (EV) is a reflection of how intentionally you’ve built your business. In today’s competitive advisory landscape, the most successful firms don’t just grow; they scale by building the right infrastructure, client base, and operational model to deliver both exceptional client outcomes and enterprise-level profitability.
At Helios, we’ve seen firsthand how top-tier advisory firms are shifting their mindset from “grow my AUM” to “build enterprise value.” It’s a strategic transition aligning capabilities, service model, technology stack, and brand narrative to create a business that’s built to thrive whether you’re in the office or not.
Key Drivers of Enterprise Value in an Advisory Practice
Whether you’re preparing for a future liquidity event or simply want to build a more resilient business, manipulating these levers in the right direction will impact your enterprise value:
1. Recurring Revenue
A consistent stream of fee-based income increases predictability and valuation multiples. Firms with high recurring revenue appear more stable and attractive to buyers or successors.
2. Operating Profit Margin
A growing firm isn’t necessarily a profitable one. Top-performing firms keep a close eye on costs, leveraging outsourcing and technology to scale efficiently without bloating overhead.
3. Client Segmentation
Not all revenue is created equal. Firms that intentionally cultivate more high-net-worth (HNW) relationships tend to drive stronger margins and deeper long-term value.
4. Staffing Strategy
Heavy reliance on a few key employees or the founder can lower a firm’s valuation. Scalable practices build systems and teams that reduce key-person risk and create operational continuity.
Takeaway: Firms that intentionally optimize for these metrics build more enterprise value than those that focus solely on asset growth.
How Advisors Can Strategically Build Enterprise Value
First, reframe the way you think about your role. You’re not just an advisor managing portfolios; you’re a CEO building a business, which requires:
Prioritizing Scalable Infrastructure
Outsource non-differentiating tasks like portfolio construction, research, and trading. Firms leveraging partners like Helios often report higher margins, fewer staffing headaches, and more time for client-facing work.
Creating a Differentiated Value Proposition
Financial planning is table stakes. High-growth firms focus on unique capabilities like personalized risk-managed models, automated yet client-specific portfolios, and clear investment narratives that clients can understand and trust.
Documenting and Systematizing Processes
From investment oversight to client onboarding, codifying your process reduces dependency on individuals and supports compliance, marketing, and operational scale.
Engineering Firm Value
If you want your firm to be worth more, you need to align your day-to-day decisions with your long-term enterprise strategy. This is where many Helios-partnered firms see the biggest transformation: not in how much they grow, but in how intentionally they grow.
Enterprise value is where capability, service, technology, and brand intersect. Build there, and you build something that lasts.
Frequently Asked Questions (FAQ)
Q: What’s the difference between enterprise value and book value for advisors?
A: Book value reflects assets under management and client contracts; enterprise value reflects the long-term profitability, scalability, and risk profile of the business.
Q: How does outsourcing impact enterprise value?
A: Strategic outsourcing allows firms to reduce costs, streamline operations, and scale more efficiently—key factors in improving operating margin and reducing risk.
Q: What is a good enterprise value multiple for an RIA?
A: It depends on your firm’s revenue mix, client segmentation, and profitability. Higher recurring revenue and HNW client concentration typically command stronger multiples.