VIDEO: Buying and Selling IFA Practices
Debbie Dry was recently featured in a SimplyBiz Advice Show discussing the pros and cons of buying and selling IFA practices. As a director of Wealth Holdings and our Head of Integration, and with over 20 years' experience in guiding firms through the acquisition process, Debbie is well placed to share her knowledge and experience.
The title, Head of Integration, is very deliberate as we believe integration is the key to successful outcomes for all stakeholders when buying and selling an IFA practice. The seller wants to achieve a fair price for their life's work. The buyer wants value for money, growth and opportunity for their newly enlarged practice. Planners and support staff want job security and the opportunity to grow and flourish. But let's ensure we don't forget the clients, not just a superficial nod to their importance in this transaction, or a number (a multiple of recurring income to be calculated), but a genuine acknowledgment of our duty of care to look after their interests. Let's remember that every pound we generate in fees comes from a client's investment and pays our salaries, rent, and bills. This is, of course, a commercial and moral necessity as deals are based on an expectation of ongoing income and therefore client retention.
If this is our starting point, we need to consider the impact on our clients in all aspects of an acquisition from ensuring the buyer and seller are a suitable match to ensuring the client's fees, investment proposition and service agreements are compatible. Consideration should also be given to who will service the client post completion, what will change and how will this potentially impact the client. As well as the commercial impact, there is of course the emotional impact; this is and always has been a people business – built on years of trust between client and planner – and it is the management of this transition that is the key to a successful outcome.
Once a match has been made and terms agreed, it is the delivery of a detailed integration plan that will determine the success of the transaction. Outlining who will do what and when, client handovers, integration with the new practice, good communication and avoiding surprises are key. This is why Debbie and her team will work with all our clients to implement an integration plan, remain involved in the transaction until it is completed (a significant commitment as many plans can involve a 2-year transition) and commit to delivering for all stakeholders.