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  • Michelle Kooy

The Value of a Book of Business

The recent case of Devji-Jamani v. Jinha 2021 BCSC 903 demonstrates why it is crucial to have a lawyer who understands the complexities of a high net worth divorce and how to properly instruct a financial expert. In this case the issue was surrounding the joint valuation of a Book of Business of a successful Investment Advisor.


The initial joint instructions given to the valuator were to provide a current value of the Book of Business. Due to the structure of the Book of Business, the valuator came back with a value of $0. Technically, this was the correct answer to the question that the Valuator was given. The Investment Advisor did not have a current interest in the Book of Business as the structure of the company was set up such that the Book of Business did not belong to the Investment Advisor.


What the Investment Advisor had was a future potential interest in a Business Succession Program when they retired or left the firm. For a 3-4 year period after retiring the Investment Advisor would receive value from the Book of Business if they cooperated and transferred their clients to a new Investment Advisor within the firm.


This is a common arrangement for Investment Advisors, and it can potentially lead to a substantial payout. If the spouse wanted to take this program into account the instructions to the valuator at the outset should have been similar to those in the S.R.M. v. N.G.T.M., 2014 BCSC 442 [SRM 2014] and S.R.M. v. N.G.T.M., 2020 BCSC 468 [SRM 2020] case, which makes assumption about participation in the Business Succession Program in the future. The result in this case was an additional application to the court to instruct the valuator to determine an alternative value based on the assumption that the Investment Advisor would take part in the business succession program in the future.

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