The price is right: valuing a portfolio.
Q: My colleague and I currently run a specialist portfolio within a brokerage. We wish to buy this portfolio, but have no idea of its value. Can you help?
To arrive at a fair market value of a book of business, you wouldneed to take into account several criteria.
The main one is, of course, is profitability. In the case of a niche
business, this can be higher than that expected for a mixed portfolio.
You should also take into account the clients, the premiums they pay, as
well as the commission and fees that you earn from the business. The lapse
ratio and the cost of handling the business should also be considered.
At the moment, the market is quite
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