Retiring IFA - Blog Archives

Preparing Your IFA Business for Acquisition – Part 3!

Welcome to part 3 of how to prepare your IFA business for acquisition!

Over the last two blogs we discussed how important it is for you to have in your mind’s eye exactly what you want to achieve from the sale of your IFA business before you even start the process…

And exactly how to make that happen…

From both your perspective and the perspective of the acquirer! 

If you are only just joining us, then check out our first two blogs to get yourself caught up and then you can round it off with…

This third and final blog! 

In this week’s segment, we will go through the importance of preparing a sellers pack and carrying out your own due diligence.

Let’s get started! 

Prepare a seller pack. 

A seller pack is a specially prepared pack put together by you the exiting party. 

It outlines your proposition, and includes client make up and key financial information. 

Why is it important?  

Well it helps you to focus on what you want to achieve out of the sale and what is important…

**Remember we said at the beginning we said that roughly 2 years of planning and preparing before starting the process is best to ensure you cover all your basis.**

Well this is essentially putting your thoughts and planning onto paper and presenting it to the acquirer. 

Having the seller pack won’t leave room for doubt or potential discord and it will let acquirers know that you are serious in your deal. 

Do your due diligence. 

I cannot stress enough how important this is! 

You might think that because you are the exiting party then the act of due diligence doesn’t apply to you.

If you don’t carry out your due diligence then how can you be absolutely sure of your acquirer’s ethical and financial position and intentions? 

Would you hand over your life’s work over to someone you don’t know? 

No, you wouldn’t.  

Your due diligence on them is as important as their due diligence on you. 

The ‘sale and purchase’ agreement. 

Once the due diligence is completed and you are approaching the closure of the deal, you will be provided with a sale and purchase agreement. 

Before you get to this stage it would be wise, if you could attain a sample of this document due to some SPA’s running to 100 pages long. 

It will help you if you know your way around the document beforehand. 

The ultimate payday. 

The ultimate question that you will hopefully have a clear answer to…

How do you want to get paid? 

Whether it is a one off lump sum or a longer term of payments based around a lifetime income…

Make sure you know exactly which method of payment will best suit you and the lifestyle you want for yourself after you have sold your business. 

Consider the timing. 

Make sure you are familiar with the statutory notice periods that you need to give to your network, insurers and most importantly the FCA. 

It is important to let all these people know in good time, so they don’t think they are an afterthought. 

It is also cost effective. Considering your costs for PI, regulatory fees and authorisation, these are usually paid in advance for 12 months with little or no refunds for cancellation during the year. 

We hope this checklist gives you a strong idea of how to go through the process of preparing yourself and your IFA business for sale. 

This blog has two main aims…

We want to assist you in achieving a premium price for your IFA business, whilst being comforted in the knowledge that your business is going to be well taken care of by its new owners.

And to stress the importance of preparation. 

Because as cheesy as it sounds, if you fail to plan then you plan to fail…

And that saying is so true when it comes to getting the best for your IFA business sale. 

Best wishes, 

Steve Hagues 

PS. Click here, to speak to one of our experienced and dedicated consultants who can: 

• Introduce you to some of the top acquirers in the UK!
• Give you a complimentary valuation of your IFA business, so you know what you are worth in a post Covid world! 

Preparing Your IFA Business for Acquisition – Part 2!

Welcome back to our blog on how to prepare your IFA business for acquisition! 

For those new to this segment, if you are looking to exit the industry and sell your IFA business, then this blog can provide you with the steps you need to take and the changes you might need to make, to ensure that your IFA business has what it takes to attract in potential acquirers…

And earn you a premium offer for your IFA business! 

Last week we covered how to start preparing not just the business but yourself for the process of putting your IFA business on the market.

If you haven’t read part 1 yet, don’t worry you can find it below and come back to part 2 when you have finished…

Go on… Give it a read! 

For our readers who are already caught up, let us dive right in…

1. Segment your client base.

So ask yourself these questions…

Which clients make me the most money and which clients don’t?

Do I have clients that I love working with but make very little profit on? 

For now whilst you prepare, nobody else needs to know the answer to those questions…

But you sure do! 

If you can’t really answer them honestly, why not try a client segmentation exercise? It will not only help you understand where your business is at now. It will also help you adjust your proposition to be more attractive for sale by focussing on quality professional relationships. 

1. Cleanse and reboot. 

For potential acquirers, there is nothing worse than being faced with piles and piles of paperwork when they are carrying out due diligence on the business they are interested in… 

And in the past, we have had acquirers pull out of deals because they felt they couldn’t properly go through everything they needed to because the paperwork was so extensive and unorganised. 

Investing in a decent CRM system to go paperless is a great way to keep your paperwork accurate, up to date and organised.

It will also be easier for potential acquirers to go through when deciding if they should invest in you! 

1. Where do your clients go from here? 

I could put money on the fact that even at this really important milestone in your life your biggest concern isn’t you right now…

It is your clients! 

Where will they go? 

What will become of them? 

Will they be looked after?  

Am I right? 

Yes I am…and of course you have every right to be concerned about the uncertainty that these questions pose.

But ultimately, who you decide to sell your business to, is your choice. 

Because you have worked hard to build up a loyal client following and know your clients better than anyone, I am sure you won’t just let them go to the first firm or adviser that gives you the highest offer.  

And don’t forget that it is crucial for your post-exit reputation that your clients continue to be well looked after...

So don’t put off really thinking  about what type of firm or adviser you want your clients to go to. 

1. Protect yourself 

To further protect yourself and your clients during the process, don’t give potential acquirers unrestricted access to your business data and client records. 

Utilise an NDA to ensue your obligations are met under The Data Protection Act and protect you against data misuse. 

1. The other POV. 

Here at Retiring IFA, we are firm believers that if you understand what a potential acquirer is looking to achieve it can help greatly to help you achieve your goal of a premium price for your business without you needing to sacrifice anything else that might be important to you.  

Categorise the acquirers you meet with so you know right off the bat, whether they will fit in with what you envision going forward. 

Are they: 

• Buying a business for growth? 
• Moving into a new market sector or advice type? 
• Do they have a desire to develop or enter a new region? 

Of course, these examples are only few but have a think about it if you were in the acquirers shoes. 

What other acquirer motivations can you foresee yourself coming up against and how would you deal with them to ensure the perfect moulding of your business with them? 

After reading Part 1 and now Part 2 of this blog, you will be starting to get a feel for the exact steps you need to take to ensure you are steering yourself towards the right acquirer for your business. 

Join us next week for the 3^rd and final part! 

Best wishes, 

Steve Hagues 

PS. Join us again for Part 3, which focusses on you the seller and what you need to do to ensure that you walk away with a premium offer for your IFA business!