Before embarking on a succession plan through a merger or sale, registered investment advisory firm owners need to take a careful look at their company’s data.

Leaner, comparable figures will aid owners who choose either type of deal, according to a webinar held earlier this month by consulting firm Succession Resource Group. Kristen Grau, the head of the firm’s seller advocacy listing program, and Nicole Frey, its director of team solutions, explained how the quality of a firm’s data affects its formal valuation. And getting a professional valuation represents an essential step prior to pursuing any sales, Grau said, and one that Frey said she highly recommends for owners ahead of a merger, as well.

Unfortunately, data preparation “is the step that most advisors underinvest in, because it doesn’t feel like progress,” Grau said. Reliable data, she said, can help prospective sellers by accomplishing four important goals:

• Ensuring that due diligence and valuations come from standard metrics
• Rooting out personal expenses and other costs that don’t relate to operations
• Placing owner compensation at market levels
• Verifying that assets and liabilities stem from the actual business

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