What Are The Qualifications of The Financial Advisor?
The qualifications of the financial advisor are very important. Specific factors to consider include: • General business valuation experience and credentials; • Familiarity with the type of transaction; • Knowledge of ERISA and other applicable regulations; • Adequacy of resources to complete the assignment; and, • Reputation for fairness, integrity and independence. The financial advisor should be familiar with a wide range of valuation techniques, including those considered most accepted and utilized in the industry. Knowledge of the financial markets and accepted valuation techniques is also very important. “Rules of thumb” and other more generalized methods of valuation are likely to prove less useful in a complex ESOP transaction. Fair Market Value and The General Concept of “Fairness.” The determination of fair market value of the stock is a crucial question because it is required; yet it is sometimes the easiest portion of the assignment. Fairness can be a much more difficult co
