Some larger distribution groups may even be able to help with funding by way of business loans for firms interested in purchasing, which in these more difficult times can help open up the number of viable buyers.
One retired IFA from Bristol who utilised his network’s acquisitions service to sell his practice and found that this helped him achieve a good match with the minimum amount of stress.
He said that the support and guidance he received was very informative and helpful throughout the sale of the practice. It took him a while to get a grasp on things but once he had explained what he was trying to achieve he found the network gave him great support and guidance on professional indemnity, network fees, levies and legal costs.
He was then introduced to suitable firms that were interested in buying his business and that, importantly, had a good fit with his objectives. Throughout the process he was provided with lots of information, facts and figures and overall, apart from one or two minor hiccups along the way, he found the process fairly stress free. Most importantly, his clients were happy with how the transfer was conducted and he received a number of compliments throughout the process which enabled him to exit his business with some peace of mind.
For firms who do not currently purchase support, or whose current partner does not offer any kind of acquisitions programme, there are also a wide range of business brokers who specialise in selling companies and matching potential purchasers and vendors. This is where advisers may need to take a bit more care in selecting a suitable partner to help them with their sale. So, given the plethora of companies out there, how can advisers make sure they select the right one?
Firstly, there are both generic business broker companies and ones who specialise in the IFA market and many advisers would intuitively have a preference for the latter, due to the specialisms of the market they operate in and the fact they may have a larger active buying population for that market.
Steve Hagues, managing director of broker business Retiring IFA believes that in terms of selecting a company to sell through, testimonials are key to getting a picture of the proposition. He said: “We have them on our website, but advisers have also asked to speak directly to others who have used our services.” He also recommends that advisers look for companies with transparent charging structures, to avoid any nasty surprises. “Our services are paid for by the buyer, not the seller and we don’t charge for due diligence or registration fees but there are numerous models out there and the important thing is to know upfront what you are paying for. There are some sharper business practices about and I am aware that some firms charge both the buyer and seller a percentage which seems a bit rich, but all this should be clear from the outset.”
