All adviser businesses are centred around people, and the client relationships that are curated over many years are the true value drivers.

    When it comes to selling your business, most acquirers will be looking at your multiple of profits and recurring income, your percentage of assets under management and your company turnover. However, as no two IFAs operate in exactly the same way, how can we expect all adviser practices to be valued using the same model?

    The answer is, realistically, that we can’t, but what all financial planning businesses can do, is be proactive when planning for sale.

    Before acquisition talks can fully develop, anyone looking to purchase your business will want to complete a due diligence process to ensure that your business is fit for sale. As part of this process you will need to show that you have a sustainable business plan, that you offer maintainable profit streams, that you have strong client relationships and that you have a succession plan in place.

    If you're in a position to offer the above at the beginning of the sale process, you’ll instantly add value to your business as you can show from the outset that you are a serious business opportunity with solid systems and processes and plans for future growth.

    Further to proving the organisational strength of your business, committed purchasers will want to look at how they can work with you to add value before sale to ensure that you are both in the optimum position when it comes to the sale.

    A key aspect of adding value to a business is the development of a strong succession plan that encompasses the long-term potential of the organisation. This means more than identifying a junior adviser, a paraplanner or a family member that you hope to be able to train up. Your successor must be as least as good as you and must be able to provide your clients with the highest level of service as ultimately, if your business couldn’t survive without you any value identified becomes redundant.


    To learn more about succession planning and exit strategy for your business, download our white paper 'Planning your exit: A guide to creating a succession plan and exit strategy'

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