Almost every top advisor in your market is trying to network with top attorneys and accountants, but there are other types of professionals who can add expertise and referral-generating power to your network, if you will just take the time to identify and meet them.
For advisors who work with business owners or on estate planning cases, business appraisers can be a natural and valuable addition to professional networks. These professionals have specialized knowledge and skills in valuing closely-held private companies, using IRS-accepted techniques.
They also can be helpful in valuing charitable gifts, whenever a tax-deduction of $5,000 or more is claimed for non-cash contributions. They rarely compete directly with advisors who specialize in investment and insurance. However, they are capable of referring wealthy clients with whom they have worked, and also the attorneys and accountants of these clients.
Focus your efforts on professionals who are qualified appraisers under the Pension Protection Act based on education, experience, and a clean record with the IRS. Most appraisers who meet this standard have one or more of these professional designations:
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Certified Business Appraiser (IBA), awarded by the Institute of Business Appraisers since 1978
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Accredited Senior Appraiser (ASA), awarded by the American Society of Appraisers since 1981
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Accredited in Business Valuation (ABV), awarded by the American Institute of CPAs since 1997
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Certified Valuation Analyst (CVA), awarded by the National Association of Business Certified Valuation Analysts since 1999
Recommending a qualified appraiser to your business-owner or estate planning clients will give you an opportunity to evaluate the appraiser’s work and begin building a relationship. You can start by asking business-owner clients: “How much do you think your business is worth?”
Most owners will either admit they don’t know the answer or volunteer a number far off the mark. A valuation engagement then becomes the catalyst for succession planning, which often unlocks large investment and insurance cases. Typically, appraisers charge about $5,000 to $10,000 to produce a valuation for a closely-held business, with supporting documentation.
Appraisers often work on closely-held business or estate planning/charitable gift cases. So, partnering with a professional appraiser can be a key to teamwork and cross-referrals. For a checklist of questions to ask in interviewing business appraisers, look here.
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