Wealth management and preservation are at the heart of financial planning and a major reason why business valuations are important for the financial services industry.
Many entrepreneurs or shareholders in private businesses need to take the value of their businesses into account to effectively manage and preserve their wealth. Proper planning and risk management are an integral part of the process and knowing the value of the businesses is essential.
In the realm of insurance policies, the insurable interest – being either the value of the shares or the value of the business itself – is vital. Being underinsured could result in a payment shortfall on assessed claims while being overinsured could result in unnecessarily high premiums. To avoid both these risks, business valuations need to be up to date and accurate.
To have an effective succession plan in place, family businesses need to be accurately valued.. The value of the shares that form part of the deceased estate will affect the amount of tax payable. This value could then be used to calculate the correct amount of life insurance required to provide adequate liquidity when needed.
Wealth planning requires a good understanding of the portfolio’s value and could be used to rebalance a client’s portfolio if required. Accurate portfolio valuations are central to other decisions related to wealth planning as well. This would include decisions such as share restructuring, for example, in which the shareholding is transferred to a trust offshore trust planning and other potential uses of trusts and succession planning.
The opportunity with clients
Having an accurate portfolio or business valuation creates an opportunity to have discussions with clients to potentially rebalance their portfolio or make sure they are adequately insured.
Worth.Business envisaged and developed an online platform making it possible for financial planners and insurance brokers to perform credible business valuations easily and cost-effectively.
The vision to empower financial professionals to perform business valuations for their clients themselves, is the driving force behind Worth.Business. This is made possible by an easy-to-use and credible SaaS valuation tool, enabling anyone with an accounting background and experience to perform accurate business valuations for their clients.
This in turn adds revenue streams to their businesses and provides a great platform on which to have conversations about the value of their clients’ businesses and how to help them insure, manage, and preserve their wealth in the future.