Record revenue while the rate you charge falls
An advisory book can post its best year ever and still be worth less than last year. Revenue is assets multiplied by a rate, and the rate has been falling across this industry for a decade. A buyer projects the rate forward, not the revenue.
Which is why the effective fee — what the book actually earned, not what the schedule says — is computed across five years here and shown as a trend. It is the number that compounds against you.
Total revenue over AUM. Falling almost everywhere, because every new dollar arrives at a lower price than the last one did.
A book can shrink on flows and still grow on markets. Only one of those is management, and a buyer prices them separately.
An ageing book is a decumulating book. The assets leave on a schedule nobody controls.
Where the price moves
Assets rising in a bull market is not evidence of anything. Net new assets is.
With the firm, the adviser, or the founder. The answer decides how much of the book survives a transition.
Breakpoints, legacy pricing and unbilled accounts make the realised rate lower than the published one, and a buyer prices the realised rate.
An examination finding is a discount, and a pattern of them is a different conversation entirely.