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      • Advisory firm valuations are at a peak now, but that situation may not last long, according to Todd Doherty, who heads the valuations team for Advisor Legacy, a consulting firm for the financial industry.>Read More
      • Anthony Whitbeck, CEO of Advisor Legacy was recently featured on the Kuttin Consulting Group's podcast describing the drivers that determine practice value and what advisors can do to ensure continuity in their practice.
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      • Advisor Legacy announces this week the successful completion of the sale of Derrick Kinney and Associates based out of Arlington, Texas to Kuttin Wealth Management, based out of Hauppauge, New York.
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      • Anthony Whitbeck, CEO and Todd Doherty, M&A Consultant discuss how the Corona Virus is impacting Mergers and Acquisitions.
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      • Todd Doherty, M&A Consultant and Valuations Expert for Advisor Legacy, shared the three drivers that maximize practice value for Advisor Perspectives. In the article, he provides a side by side comparison of two similar practices, and how the factors of value impacted each firm’s overall valuation.
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      • Wealth Management highlights the launch of Advisor Legacy as a practice that bridges the gap between in-house succession departments and listing services.
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      • Advisor Legacy brought on as consultant to support buyers and seller’s on Skyview’s new platform, the Advisory Practice Board of Exchange, a secure and confidential platform for buying and selling practices.
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      • Advisor Legacy launches to bridge the gap between practice listing services and in-house succession departments.
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    How Biden’s Tax Proposals Will Impact Successions

    How Biden’s Tax Proposals Will Impact Successions

    A new president always heralds change. So far there has been a tremendous amount of new legislation proposed, along with executive orders designed to stimulate the economy. Many more changes are being discussed. Among the many changes expected with this president is an increase in capital gains taxes.

    Currently, Biden is proposing to raise capital gains taxes from 23% to as much as 39.6% for high-earners. Not only will this impact many financial advisor’s clients, but it also has an impact on a financial advisor looking to sell their practice. In a typical practice sale, the majority of the sale price is allocated to goodwill, which is subject to capital gains taxes, while any held as part of a non-compete or other clause are treated as ordinary income. If the tax hikes are passed, this could mean that the entire sale of a practice would be taxed at the higher rate (almost 17% higher).

    Many experts don’t believe the new tax rate would go into effect until 2022, even if it is passed this year. For advisors looking to sell in the next 1-5 years, this may mean it makes better financial sense to sell now, even if the advisor plans to continue to stay on and work over the next several years. These new “sell and stay” arrangements have gained popularity as they help ensure a smoother transition and give both parties more time to completely change over the practice. Other advisors may choose to go ahead and use this as a prompt to exit completely. As it is still a seller’s market, valuations are high and there is a large pool of willing and able buyers at the ready.

    Advisors looking to sell before the tax rate goes up need to take steps now to start the process. It can take anywhere from six months to a year on average to sell a practice. With the end of the first quarter fast approaching, advisors need to move quickly to close the transaction before any new legislation goes into effect.

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