Are you planning to retire or is it time to move on from your financial practice to something else? Whatever the reason, succession planning is an important part of this process. If you are leaving your financial practice, you have to ask – what will I do with my book of business? If you are planning to sell it, it’s important to carefully consider all the options.
As a successful financial adviser, you’ve spent your career building your business, including solid relationships with your clients. When it is time to sell your book, you want to do so in a way that is best for you and your clients.
Things to consider when selling your book
1. Get an impartial valuation
You are proud of the business you have built and probably have an idea of how much you believe it is worth. In order to attract the right buyer, protect your clients, and ensure you profit appropriately from the sale of your book, it is important to have your business professionally evaluated. Conduct research, talk to other advisers, and work with an established business appraiser or CPA who can guide you as to the value of both your hard assets and your client list.
2. Find the right fit
In most cases, your clients aren’t attached to your business model, they’re attached to you. They trust you and want to work with you, not someone new. It’s important to keep this in mind when searching for the right buyer for your book. While it is important to get the correct value for your book, you need to look beyond monetary evaluations to your clients – a central part of successfully transitioning your book is transitioning the clients that add value to that book. You need to find a buyer who will be as good for your clients as you were – you owe this to your clients who trust you and to yourself. To do this, your most suitable buyer should share your investment and client service philosophies.
3. Put in place an information management system
If you are the central touch point of tour business, much of your client information, investment knowledge, and business approach might exist in your head. When it comes to successfully transitioning clients and business information, this can be a make-it-or-break-it stumbling block. If you do not have standard operating procedures, meeting minutes, and client information in a standardised, written format, this must change as soon as possible. The difference between a well-managed book and a disorganised one can have a substantial effect on the value of your business.
4. Manage your clients with respect
We’ve mentioned the importance of caring for your client relationships – in order to keep clients in your business and protect their interests (and investment in you as their adviser), you will need to manage their concerns and expectations at every stage. Communicate regularly with your clients about upcoming changes and be there to ensure a smooth handover from your own practice to that of the new owners.
Planning the sale of your book can help ease your clients into it, get you the right buyer, and ensure you get the right price for your business. Are you an independent financial adviser looking to sell your book to a reputable financial house? Talk to us – at TRG, we love being independent financial advisers, we respect our clients, and approach our investment and insurance tasks with reputable experience and expertise.