Expanding my previous answer to cover the valuation aspect:

Valuation of a cash-generating asset (and from an investor's perspective, a company is a cash-generating asset) can be done by assessing how much return this asset generates over time until the investor's investment horizon. This time horizon means: "By when does will the investment be recouped?". It is expressed as a P/E-multiple (Price/Earnings-multiple). These multiples are industry-specific, but mostly lie between 7 and 15. So let's assume a P/E multiple of 10. This means, the value of the wealth menagement firm is 10x its yearly earnings (profits).

How to calculate earnigns and value of a wealth manager?

1. Understand the earnings model! Wealth Managers invest their clients' cash (Assets under Management - AuM) to generate a return, and they earn a certain share of the increase in value. Let's assume they get 20% of the increase in AuM value, and their own operating costs are 2% of AuM.

2. Let's assume that, on average, the wealth manager generates 8% year-on-year return on the AuM

3. Since we know AuM (let's assume 1 billion USD), we can now calculate the earnings = revenue - cost = [1 billion * 8%*20%] - [1 billion * 1%] = USD 16M - USD 10M = USD 6M yearly profit

4. The value of the wealth management firm is equal to earnings*P/E-multiple; hence USD 6m * 10 = USD 60m

Hope this helps!

Cheers, Sidi