IFA Due Diligence: The Flipside

After being in this mergers and acquisitions game for well over a decade, believe it or not I have pretty much seen it all when it comes to buying and selling IFA Businesses

And IFA due diligence... Or should I say 'lack' of IFA Due Diligence has unfortunately been a hot topic on many a deal I have seen in my time

IFA acquirers have ended up with a business that wasn't worth what they paid for it until after signing on the dotted line...

… And IFA sellers have ended up signing away their business to an acquirer who in the end didn't hold up their end of the bargain once the deal was done!

We as a business will always actively encourage IFA buyers to do their due diligence on a potential acquisition

However on the flipside, you as a potential retiring proprietor need to ensure you carry out the same... If not more, due diligence, than the acquirer!

Why? 

Well I would've thought it was obvious... You wouldn't want to choose the wrong type of acquirer to pass over your life's work to and for less than what it is worth would you?

And... I am right in assuming that you only want to retire the one time? 

And do it right the first and only time so you can sail away and live out your best life? 

Excellent.... then we are on the same page!

So far I hope I have made the point of just how important it is for retiring proprietors to do their due diligence on potential acquirers, however if I need to crank it up a notch then let me introduce to you the eBook on The 3 Biggest Mistakes when Selling Your Financial Services Firm. By clicking here and spending 10 minutes of your time.... that's right, just 10 minutes, I can show you just how important it is to be asking the right questions to your potential acquirers

Questions such as:

Are they serious acquirers? 

Unfortunately when you start the process of selling your IFA Business, you will come across acquirers who come to the fore front quickly. Initially they will charm you, and they will talk the talk... but realistically it is those types of acquirers you need to avoid as they lack any real conviction... Or real funds to actually walk across the finish line with you.

Letting your self be dragged over half way through the process to find out that you have attracted this type of acquirer will leave you disappointed and disheartened, but more importantly you will have wasted valuable time and money to never see an end result and worst of all...

… You will have to start the process all over again! 

What is their acquisition history?

If they have acquired before then...

… How many businesses have they acquired? 

What size of business have they acquired in the past?

Have previous acquisitions successfully fit in with their business model? 

Have they been able to retain the clients after an acquisition has been completed?

Looking back at a firms previous acquisitions you will be able to see trends, and if you dig down deep enough you will quickly be able to deduce whether your IFA Business fits in with what they want to acquire. If your firm doesn't look it meets their previous acquisition criteria then there is a strong chance you are wasting your time! 

Funding

I can tell you now that the buyers who can't stop boasting about having lots of money to throw at you, are usually the ones who are going to leave you frustrated and disappointed when that big premium offer they promised you, doesn't come to fruition.  

Just one of the ways to avoid being won over by a 'talker', is to get something on paper...

… Because if they are willing to commit to a signature that proves that they will pay what they say they are going to pay, then you know you aren't just wasting your time! 

All this might seem pretty obvious to you, but did you know that over 65% of IFA sellers make at least one of the mistakes mentioned here in the eBook which has immediately meant they were unable to leverage a premium price for their IFA Business! 

And if you too, want to avoid getting a premium offer for your IFA Business then you won't click here to download our eBook to make yourself aware of the types of unsavoury buyers who you should never ever sell to under any circumstances! 

Best Wishes

Stephen Hagues

PS. So, how did you find the eBook? No doubt your mind is ticking over isn't it! Well, if you want to go more in depth on how to approach your due diligence, then click here to book in with our highly trained experts for a free, no obligation discussion now!