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Selling a Financial Advisory Practice

You’re a financial advisor who is considering retirement or simply wants to do something different. You have worked so hard to ensure that your business is successful and upstanding. When you build a financial advisory practice from the ground up, it is like raising a child. You have spent countless hours working towards the point at which you have reached. You have built strong, lifelong relationships with your clients who are practically family. You may be worried about selling your practice because you are unsure of what may happen to your hard work and your clients after the deal is done. At Principles of Financial Planning, we have experience purchasing financial advisory practices. We are not new at this. It is important to us that we ensure you feel like your business and your clients will be in good hands, and they will be!

At Principles of Financial Planning, we will take care of your clients and you during the process of the financial advisor acquisition. We work with advisors who have poured their heart and soul into their practice. Our clients receive personal care and individual attention. Your loyal clients will receive the same level of care and attention we give our present clients. We work together to ensure that we are a good fit for you to sell your practice to. We create an environment of honesty and communication. We only want the best for you and your clients. When you sell your practice to Principles of Financial Planning, you become part of our family too. If you are thinking about selling a financial advisory practice, Principles of Financial Planning may be interested. Call us today!

Five Mistakes to Avoid When Selling a Financial Advisory Practice

Even if you are an advisor who has years of experience working with your clients, you may not have any experience when it comes to selling a financial advisory practice. This can be problematic, considering it is your bread and butter we are talking about here. You built your practice from the ground up, and you do not want to make some of the mistakes that many advisors make when selling a financial advisory practice.

  • Seeking last-minute changes on the terms – Attempting to renegotiate the terms of the deal right before signing can ruin the whole deal. This essentially destroys your credibility and breaks down trust. Often, financial advisors who are selling a financial advisory practice tend to let their emotions get the best of them, which is likely a high cause of these last-minute switch-ups. Instead of allowing your emotions to get the best of you, write down the most important key terms to you and the values behind them.
  • Not understanding how deals work – Many technicalities go along with the terms of the agreement when a financial advisor acquisition is occurring. Sometimes buyers can add terms contingent upon the firm meeting specified targets with client assets at specific If the seller is not familiar with this kind of language and terms, they can run into issues when communicating their misunderstanding with the potential buyer. Avoid this by educating yourself and familiarizing yourself with how a financial advisor acquisition works.
  • Sharing too much information – It is vital to have boundaries and consider what those are before discussing a financial advisor acquisition with a potential buyer. For example, imagine you slip up and tell the potential buyer that you have not had any other offers to purchase your firm. That can put you at a disadvantage during negotiation and valuation.
  • Forgetting key details – It is all too easy to get excited during the process of a financial advisor acquisition. So excited, you forget to mention important information about your vision for the future. For example, if you are negotiating a merger and both of you want to retire relatively soon – what happens if this crucial information is not communicated upfront? It is imperative that the buyer and seller of a practice both communicate their vision for the future. Taking the time to sit down and create a vision statement together, including new goals for client retention, etc., can make a huge difference for both parties’ success and overall happiness when a merger or acquisition occurs.
  • Having bad manners – This sounds like one that should go without saying, but some parties make this mistake during a financial advisor acquisition. If you spend your time airing out your dirty laundry or gossiping about old issues with partners or former potential deals, you will indeed be shooting yourself in the foot. It is essential to always remain professional when discussing selling a financial advisory practice.