The Retail Distribution Review, the Budget and the change to the twin-peaks regulatory authority have all forced advisers’ hands in terms of everything from business models to changes in tax policy and charging structures.
But although the business blogs and the online commentary show how very tough it has been for many firms, especially now HM Revenue & Customs has got involved in the rebate debate, there are just as many media reports of firms who have got it right and are growing by acquisition.
At the beginning of April, Towry announced it was in talks with more than 8o smaller advisory firms with a view to making strategic purchases. Attivo Group is in talks with more than 10 firms to help it grow by acquisition in 2013.
Sandringham Financial Partners, the new venture from the so-called ‘founding father of networks’, Ken Davy, said it was now ready to bring several new partners on board, while Hampshire-based firm Chadney Bulgin bought Cawley Financial Services for an undisclosed sum.
Then there is the organic growth through hiring more staff to take the business forward: Fiscal Engineers in Nottingham; London-based Serenity Financial Planning is on the acquisition trail; the What Group is hunting for 100 new partners.
Judging by the flurry of activity on twitter and other social media, many advisers have also brought apprentices on board to train them up to become paraplanners and then advisers. Others have forged partnerships with like-minded firms.
So far, therefore, 2013 and all the changes we have seen in just a few short weeks, have not heralded the death of the IFA industry, but the change.
And change is the operative word. While some firms talk of deals in the pipeline as a sign of their financial health and determination to continue post-RDR, the other side of this coin is that many firms are looking for a sale.
Speaking with some small business owners who do not have the might or the distribution reach of the larger firms, the prospect of not only facing these changes but succeeding in what portends to be another tough economic year is daunting.
Yet it is not doom and gloom. These advisers have already gotten their businesses RDR ready. They trained themselves and their staff to be level 4 qualified, implemented adviser charging models and groomed themselves to meet the regulator’s deadline.
This time, this investment, this effort will not have been wasted if an adviser wishes to sell his client book and move on. All potential buyers are looking not for a quick client injection or easy distribution, but for good quality businesses.
So what can you do to ensure your business is well-groomed for the most profitable sale?
1) Analyse and segment your clients
Spending time getting ready for the RDR will have meant analysing the client bank and working out which customers are the most money-generative and which ones have been worth spending time on.
