Succession Planning Update

Things to avoid when selling your business

As financial planners you have built your businesses on helping individuals create strategies tailored to meet their financial goals. In some instances, advisers spend so much time dedicated to clients their own financial plans and retirement planning can take a back seat.

There are several mistakes that are often made by advisers when considering their succession plans which if avoided will result in a better outcome both culturally (i.e. for the client with a better fit on investment approach and service) and financially (i.e. ultimately choosing the right time to get the best value for your business).

Don’t wait too long

We have many conversations with advisers who want to sell their business, but it is something that will be done next year, and then the year after that. The sales process can take several years. You must first find a buyer you are happy to consider, negotiate, hand over the business and then manage the client relationships once the deal is done. Any buyer that can see you have been planning and considering your succession for some time and not a quick “I’ve had enough” sale is likely to result in a higher valuation of your business.

Also, if you are running a ‘lifestyle’ business and not looking for new clients, bear in mind that as you get older so are your clients. This may lead to lower valuations due to the age of your client bank.

Not maximising your potential

When looking to sell your business you want to make it as attractive as possible to any potential buyers. Think about your processes, records and compliance and make sure there are no issues that would cause a buyer to reconsider acquiring or reducing the valuation of the business. An acquirer will be looking for a well-run business that they can integrate quickly.

Selling to the wrong firm

Fit is crucial for everyone involved. Valuation is obviously important. Any adviser who has built their business over many years wants to achieve a fair value. However, this should not be the overriding motivation which leads to selling to the highest bidder. If you sell to a firm who has a completely different proposition and culture, clients will leave, resulting in considerable reduction in deferred valuation payments.

We have many Transact users looking to acquire, if you are considering your options and would like help finding a like-minded business do get in touch. We would be happy to work with you to find firms who will look after your clients and give you the security you need in retirement.

If you are thinking about your long-term plans and would like to discuss your options and how to plan for the best outcome, not only for yourself, but also your clients and staff, then please do get in touch and we would be happy to help, via successionplanning@integrafin.co.uk.

 

1. Introduction
2. TOL Recent Enhancements 
3. Development Summary for 2023
4. New Aggregated Second Dealing Point
5. Succession Planning Update
6. Share Class Conversion
7. Transact – BlackRock MPS Update
8. Maximum Tax-Free Cash Options
9. Fund Changes
10. Interest on Cash Deposits
11. Transact Events 2024