Increase Your Company’s Valuation By Moving to Managed Model Portfolios

In the world of financial advisory firms, valuation isn’t just a number—it’s a reflection of your firm’s structure, scalability, and sustainability. Whether you’re preparing for a future merger, acquisition, or internal succession, increasing enterprise value should be a strategic priority.

One of the most effective and often overlooked ways to enhance your firm’s valuation is by adopting managed model portfolios (MMPs). At Equity Partners, we’ve seen firsthand how this approach improves operational consistency, strengthens profitability, and sets the foundation for long-term business growth.

What Are Managed Model Portfolios?

Managed model portfolios are professionally designed investment models constructed to meet specific risk-return profiles. These portfolios are typically developed and maintained by a third-party asset manager or internal investment committee.

Once established, the models are deployed across client accounts in a consistent, repeatable manner—eliminating the need for custom portfolio construction for every client.

Why Valuation Matters

A firm’s valuation is influenced by several key factors:

• Recurring revenue predictability
• Operational scalability
• Advisor-to-client ratios
• Compliance and risk management
• Succession-readiness

MMPs address all of these areas directly, increasing your firm’s appeal to acquirers, partners, and future successors.

1. Operational Consistency

Model portfolios create operational consistency, which is highly attractive to buyers and private equity firms. Instead of relying on one advisor’s subjective investment strategy, firms with MMPs run on a uniform investment process.

This leads to:

• Standardized onboarding and rebalancing
• Less client service variability
• Easier staff training and scaling

Consistency equals predictability—and predictable businesses command higher multiples.

2. Time Efficiency and Advisor Capacity

Advisors who adopt MMPs free up significant time previously spent managing custom portfolios. This time can now be allocated to:

• Client acquisition
• Planning and education
• Relationship-building

Greater advisor capacity translates to increased revenue per advisor and faster growth—both of which influence valuation.

Ron Robertson of Equity Partners often says: “Your firm’s value isn’t just what you earn today—it’s your ability to replicate and scale that success tomorrow.”

3. Profitability Enhancement

When advisors use model portfolios, administrative costs decline:

• Fewer trading errors
• Lower research and due diligence expenses
• Simplified compliance monitoring

Combined, these efficiencies improve the bottom line. And higher EBITDA margins almost always result in a higher valuation.

4. Succession and Transition Readiness

Firms that run on models are easier to transition to new ownership or leadership:

• Investment philosophy is embedded in the system, not the founder
• Less disruption during transitions
• Better client retention post-ownership change

Buyers pay more for businesses that won’t lose clients or productivity during a leadership change.

5. Scalability

MMPs are a natural fit for growth-oriented firms. New clients can be onboarded faster, portfolios implemented in minutes, and changes made across all accounts instantly.

This scalability means:

• Faster growth without proportional overhead
• Greater efficiency per client household
• Ability to serve more clients with fewer resources

How to Implement MMPs Effectively

1. Select Aligned Managers: Choose third-party asset managers that reflect your investment philosophy and serve your client demographic.
2. Integrate Technology: Ensure seamless workflows between your CRM, custodian, and investment platform.
3. Communicate Clearly: Educate clients on the benefits of models—discipline, diversification, and professionalism.
4. Maintain Oversight: Keep the advisor at the center of the relationship while leveraging the investment expertise of professionals.

The Equity Partners Advantage

At Equity Partners, we specialize in helping advisors adopt and implement model-based systems that improve their firm’s scalability and value. We work with you to:

• Identify suitable managed model portfolios
• Integrate them into your firm’s workflow
• Provide strategic guidance on growth and exit readiness

Whether you plan to sell in five years or simply want a more profitable, sustainable practice, model portfolios are a smart step toward your goals.

Higher valuations start with better systems. Let Equity Partners help you make the shift.