2019 Best Practices Study

47.8%

46.5%

41.5%

36.8%

32.1%

29.6%

27.8%

27.8%

23.9%

22.7%

19.5%

16.7%

< $1.25M

$1.25M- $2.5M

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

> $25.0M

Average Top Quartile

47.5%

45.7%

43.4%

39.1%

33.0%

27.0%

30.2%

29.6%

29.6%

26.4%

27.5%

27.7%

23.5%

26.6%

20.3%

23.1%

22.1%

18.3%

< $1.25M

$1.25M- $2.5M

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

> $25.0M

2018 BPS Average

2019 BPS Average

2019 BPS Top Quartile

Note : Pro Forma EBITDA excludes all administrative expenses (depreciation, amortization of intangibles, officer life, interest and other.)

AGENCIES WITH REVENUES OF:

<$1.25M $1.25-$2.5M $2.5-$5M $5-$10M $10-$25M >$25M

The Rule of 20:

Low

3.8

10.6 26.3 51.4 39.5

6.1

7.7

10.1 19.4 42.3 28.1

4.8

Average

27.6 54.7 43.5

22.4 43.4 32.2

20.5 40.8 29.0

17.0 34.0 22.8

High

Top Quartile

The Rule of 20 measures an agency's shareholder returns. It is calculated by adding 50% of an agency's Pro Forma EBITDA margin to its organic commission and fee growth rate. An outcome of 20 or higher means an agency is likely generating, through profit distributions and / or share price appreciation, a shareholder return of approximately 15% - 17%, a typical agency / brokerage return under normal market conditions.

43.5

39.5

32.2

29.0

28.1

27.6

26.3

22.8

22.4

20.5

19.4

19.2

18.1

17.7

17.0

16.7

15.4

14.6

< $1.25M

$1.25M-$2.5M $2.5M-$5.0M $5.0M-$10.0M $10.0M-$25.0M

> $25.0M

2018 BPS Average

2019 BPS Average

2019 BPS Top Quartile

 66