Time Scales

by | Sep 10, 2021 | For Clients

Summer is nearly over, and we are in the climb to the end of the year. Now is the time some IFAs will start to think about retirement. If this, is you, the good news is we still have plenty of willing and cash ready acquirers who would be interested in listening to your requirements. if you wish to sell your IFA practice

There is much greater flexibility surrounding sales nowadays, but many IFAs still want a walk away deal. Under this model, buyers will complete the deal and will then expect you to hand over your clients allowing you to then retire. The quicker you can do this the quicker you can move on.

Typically, you will receive 50-60% of the agreed price upfront with the remaining balance paid equally after 12 and 24 months. This will be based on your recurring revenues at the point of completion and during the 2 years post this.

In our experience to do this deal properly, will take between 3 to 9 months from start to completion if you use a broker, and 12 months plus if you decide to go it alone. Don’t forget, you will be required to be available for a while after the deal to ensure the smooth transition of clients.

So, if you were planning to retire at the end of this year, it may now be too late but starting to think about marketing your business for the first quarter of 2022 is certainly a good idea.

There is a lot of misinformation relating to the best month to sell, many think that first marketing a business in December or late in the year could be detrimental as firms may not be looking to acquire at that time, this is counter intuitive to the fact that companies that are looking to acquire see no difference between January and December for example.

The reality is, if you come to market in November or December, you are likely to receive more attention from acquirers as when January comes, they will be viewing far more propositions as people return from their Christmas break and decide to sell.

In any event, we always recommend early preparation for a sale, as a change in personal circumstances is sometimes the driver for a disposal, whether as a business owner or a partner in a larger firm. Often this change can happen quickly and unexpectedly.

Even if you feel retirement is a while off, please talk to us as we can help put in place a plan that will ensure you are well prepared for any event.

Harrison Spence has an unparalleled view of UK financial services based on its unique position in the retail financial services market and the combined experience of our partners. I would be glad to hear from you personally if you feel it would be helpful to explore in confidence your strategic planning or any challenges you are currently facing. As always, any first meeting is at our expense.