What a CFO does for a practice of one
Not bookkeeping, and not another dashboard login. A fractional CFO owns three questions for an advisory practice: how strong is the recurring revenue really, how do we fund the next stage of growth, and what does the exit look like while there is still time to change it. Our Fractional CFO engagements run on a quarterly rhythm sized for a one-licence practice, with Walla Assaf's banking and corporate-finance background doing the heavy lifting whenever a lender is in the room.
Trailer durability is a number, not a feeling
Recurring revenue is why advisory books hold value, and recurring revenue has quality grades. The same trailer total can sit on a young, accumulating client base or on one where most households are already drawing down RRIFs, shrinking the assets those trailers are calculated on every single year. A buyer will price that difference eventually; you should price it now, while there is still time to do something about it. A deliberate shift toward fee-based accounts changes the arithmetic too, trading commission volatility for advice fees that carry HST but keep paying in a year when nobody transacts. Each quarter we put four numbers in front of you:
- Recurring share of revenue: trailers, renewals and fee-based billing as a portion of the whole, and the direction it is moving.
- Client age and decumulation mix: how much of the asset base is in drawdown rather than accumulation.
- Concentration: revenue sitting in the top ten households, and by fund family or carrier.
- Retention: households lost and assets transferred out, measured, not remembered.
Buying a book is a financing exercise first
Acquisitions are how practices jump in size, and they are won or lost on structure. Sellers finance part of most deals, prices adjust to actual client retention, and clients themselves must consent to move, which makes attrition the assumption every projection lives or dies on. Lenders will fund the balance, but only against recurring revenue you can prove, which is where stream-level records and a credible model earn their keep. We build the model, stress the retention assumption, and package the request through Business Financing Advisory in the language credit committees expect.
| Deal component | What it does | What we model |
|---|---|---|
| Down payment | Proves commitment and sets the loan size | What your practice can fund without starving operations |
| Bank financing | Funds the balance of the price | Debt service against the acquired trailer stream, after attrition |
| Vendor take-back | Keeps the seller invested in the handover | Rate, term and what happens if retention slips |
| Retention adjustment | Reprices the deal to the clients who actually stay | The measurement window and an honest base case |
Growth you can afford, hired at the right time
Between deals, the CFO question is capacity: at what point does the book fund a licensed associate or a full-time assistant without one big year quietly subsidizing a slow one? Because commission income is lumpy, we answer with a rolling cash forecast rather than last year's average, and we size the hire against the recurring base, never the pipeline. Compensation design matters as much as timing: a split tied to the revenue an associate actually services scales safely, while a fixed salary hung on a lumpy book does not. The same forecast decides when the corporation can commit to office space, a marketing budget or the next tranche of a vendor take-back without leaning on your operating line.
The sale is a tax event you design years early
The lifetime capital gains exemption, now $1.25 million, applies only to a sale of qualifying small business corporation shares: held for 24 months, more than 50% active-business assets throughout that period, and more than 90% at the moment of sale. Two honest catches for advisors. First, many book sales in this channel are asset deals, where the buyer takes the client relationships rather than your shares, and the exemption never enters the picture. Second, a corporation that has spent a decade accumulating investments can fail the asset tests, and purification takes time, sometimes a reorganization through Corporate Restructuring. Succession planning that starts with the listing is already late; ours starts while the sale is still hypothetical. Engagements are quoted in writing after a free 15-minute discovery call, the same way we work with advisors across Mississauga and the GTA.
