by Jason Ruchaber, CFA, ASA
We suggest considering three primary criteria – Credentials, Experience, and Fit
Credentials
Professionals who hold themselves out as appraisers should hold a professional certification in an appraisal discipline from one or more credentialing organizations. Though not an exhaustive list, the following are some of the more widely recognized designations for business valuation ·
- Accredited Senior Appraiser (ASA) – offered by the American Society of Appraisers https://www.appraisers.org/credentials/start-here-asa’s-professional-credentials ·
- Certified Valuation Analyst (CVA) – offered by the National Association of Certified Valuators and Analysts https://www.nacva.com/certifications ·
- Chartered Financial Analyst (CFA) – offered by the CFA Institute https://www.cfainstitute.org/en/programs/cfa/charter
- Accredited in Business Valuation (ABV) – offered by the American Society of Certified Public Accountants as a supplemental designation for those who hold the CPA designation. https://us.aicpa.org/membership/join/abv-exam
Experience
When selecting an appraiser it is important that the appraiser have direct, meaningful experience valuing the subject Appraisers work in a vast number of subspecializations, including: ·
- Appraisal Discipline – Business valuation, compensation valuation, machinery and equipment, real estate, intellectual property, gems and jewelry, fine art, etc.
- Organization Type – Public company, private company, start-ups, tax exempt organizations, etc.
- Asset Category – Equity, stock options, ESOPs, warrants, derivatives, debt instruments, etc.
- Industry or Sector – Healthcare providers, life sciences, healthcare entities, Health information technology, etc.
- Intended Use – Mergers and Acquisitions, financial reporting, tax reporting, regulatory compliance, bankruptcy, dispute resolution, etc.
Due to the significant body of knowledge, regulation, and practical nuances associated with each of these areas, it is no longer adequate to be a valuation generalist and remain proficient in rendering a credible opinion of value.
Fit
When selecting an appraiser it is also important that they are a good fit for your organization. Just as a physician’s “bedside manner” can impact the patient’s
understanding, acceptance, and attitude toward their diagnosis, so too can an appraiser’s approach to the valuation assignment impact the understanding, acceptance, and attitude toward their findings. Some characteristics to consider include:
- Accessibility –work hours, response time, preferred channel- email, phone, text;
- Professionalism – knowledgeable and relatable to internal and external stakeholders
- Emotional intelligence – ability to navigate egos, personalities, and stresses of process
- Openness to Input – ability to listen and adapt as they navigate the appraisal
- Attention to detail – ability to identify trends, issues, and nuances of from the data
- Manner of speech – ability to communicate complex financial topics in a manner that is easy to understand
- Integrity – are they willing to do what’s right even if it’s not the desired outcome
Different circumstances may call for different characteristics in an appraiser, but the best appraiser for your organization will be one that mirrors your culture and values and can present a compelling and defensible valuation opinion.
At Root Valuation we help physician leaders successfully navigate business and employment transactions to that their value is fully realized. If your organization needs help navigating your appraisal process, contact us at info@rootvaluation.com.