Buy a financial planning business

Buy a financial planning business

Buy A Financial Planning Business If you are worried that you won’t be able to find a cheap essay writing service capable of dealing with your academic papers, we are here to prove you wrong. Due to the impeccable automation, we have reached Buy A Financial Planning Business through almost a decade, we manage to keep an impressive balance between the top-notch quality custom essays and Every essay writer is Buy A Financial Planning Business highly qualified and fully capable of Buy A Financial Planning Business completing the paper on time. November 6, Recent Multiples Achieved – Financial Planning and Accounting Practice Sales – (Updated in real time) Adviser Voice Article – What’s driving the sale of financial planning practices: a look at the data that tells the story; Warranties – Checklist for Buyers when buying shares in a business

For Sale – Growth Focus

You may have spent years or even a lifetime growing your planning firm, and it is probably your most valuable asset, buy a financial planning business. Unfortunately, many financial planners leave money on the table when the times comes to put the business up for sale — either through inadequate planning and preparation, not knowing the true worth of the business, negotiating from a position of weakness or accepting an offer from the first buyer that walks through the door.

With an ageing population and a challenging regulatory environment in the industry, it is more important than ever to plan for your exit early, understand your numbers and position your business in the right way to secure a successful sale.

For a knockout sale price and smooth transition process, there are a number of important steps to follow. And yet, poor planning buy a financial planning business preparation is often the reason for a failed business succession plan or an inability to secure the best sale price for a business. You are more likely to maximise your sale value and sell the business in a much shorter timeframe. If you want to build your financial planning firm and make it ready for a future sale, buy a financial planning business, getting the business model right is a critical factor.

In a rapidly shifting changing regulatory and market environment, it is important to operate as an advice-based business and buy a financial planning business purely as a sales organisation. This, in turn, leads to more engaged clients which inevitably increases the chance of a more successful transition and higher sale price.

Making sure you have a sustainable and comprehensive business model that can grow into the future is a key factor when it comes to preparing the practice to be sold. Getting a handle on what is happening in the marketplace will give you a great idea about how firms like yours are valued. Assessing shifts and innovations in the wider financial planning arena, including industry reforms and legislative changes, will also assist you in planning for the future.

The Future of Financial Advice FoFA reforms and demographic changes ie, buy a financial planning business, an ageing customer base are driving change.

For example, FoFA introduced opt-in rules where financial advisers need to to obtain written client agreements every two years in order to charge for ongoing advice. How many new clients have you acquired since July ?

Which of your clients are grandfathered under FoFA ie pre-July ? Would the clients be grandfathered for Opt In if there was a change of AFSL as part of sale? Understanding these changes and questions will enable you to prepare your business for sale in a more informed way which will, in turn, be more appealing to buyers.

Document primary systems and processes should be documented to ensure consistency across the board. Maintain current and comprehensive client data on clients and make sure that all of your other business information financials, processes, employee management are available as electronic records so that prospective buyers have confidence that they have access to all they need to assess the worth and future potential of the business.

Detailed and reliable financials demonstrating low capital expenditure requirements and strong cash flow will make your business a highly attractive acquisition, buy a financial planning business. Your best option is to hire the services of a sale and acquisition professional who can help you define a smart sales strategy that aligns with your personal, business and family goals, position your business to attract buyers and set up your advisory dream team think legals, accounting, tax, valuation.

Examining the potential buyer requires you to put your critical thinking buy a financial planning business on and step outside of your business for once, buy a financial planning business.

However, the real issues are you know your business inside out but do they care enough about your business to help it grow into the future? Is the buyer a strategic fit? Is there a cultural match? Do they understand your company culture and respect the way the business treats its staff and operates overall?

If the buyer owns a current business which they plan to merge with yours, here are some further questions to consider:. Valuing any business is always a challenging task but especially buy a financial planning business you operate a professional services business which relies on its client list. It can be hard to put a price tag on service businesses as the valuation process involves a speculation of future earnings as well as a number of variables and assumptions.

Ultimately, there buy a financial planning business only one value that really matters: the buy a financial planning business a person is prepared to pay to acquire the business or part of it.

The financial advisory industry has changed considerably over the last ten years, moving from a transaction-centred model in the 80s to a more client-focused, fee-based revenue model in recent times.

This means valuation methodologies have changed to incorporate a number of variables including cash flow, buy a financial planning business, systems and processes, the age and demographic of the client base, marketplace demands, financing terms and recurring revenue.

Most buyers will be interested in sustainable, recurring revenue or EBIT, as opposed to gross revenue or funds under management.

The most commonly used method is market value where the valuer to determine the price to be paid for the practice by reference to comparable sales. For more information on valuation methods and common valuation questions, you can download our free practice valuation guide here. But it really is critical that you know buy a financial planning business likely sale value range and the likely profile of a premium buyer for your type of business as well as the style of transaction that would maximise your sale price, before you start.

Hiring a valuation expert to help you implement a solid strategy will not only assist you in protecting your assets it will help maximize the value of a sales deal before you sign on the dotted line. Like other professional services businesses, buy a financial planning business, such as accounting practices or law firms, clients develop a strong rapport with their trusted advisers. In order to keep the largest number of clients in the practice when you sell it, you will have buy a financial planning business manage the transition carefully and ease your clients into it, buy a financial planning business.

Let all of your clients know about the impending change and what they should expect from it. In my experience, avoiding the following common mistakes will make the sales process easier and more successful:. We will never share your details. Please note that it may take around 5 minutes for the Valuation Guide to arrive in your email inbox. Do your market and industry research Getting a handle on what is happening in the marketplace will give you a great idea about how firms like yours are valued, buy a financial planning business.

Potential buyers may also ask reform-related questions like: How many new clients have you acquired since July ? Focus on data, systems and processes Document primary systems and processes should be documented to ensure consistency across the board. In order to maximise your chances of a successful sale, focus on these steps: It might sound obvious but make sure you have a high quality business with a unique value proposition; Ensure that your business is an efficient and well-run machine in terms of systems, technology and processes; Put mechanisms in place to attract and retain new clients; Be ready to show that you have engaged staff and the ability to attract and retain talented employees who will help sustain the business in the future; Eliminate or reduce any risk factors in the business so the prospective buyer trusts that the business is a solid purchase proposition.

Assessing potential buyers Examining the potential buyer requires you to put your critical thinking cap on and step outside of your business for once. Strategic buyers are buyers who will make more money from owning your business than you do due to their current business and circumstances.

Whether or not the buyer is a cultural fit may be one of the most important factors of all. If the buyer owns a current business which they plan to merge with yours, here are some further questions to consider: How do both businesses charge for their services?

And are the value propositions the same? Is client ownership an issue? How do the client segmentation models operate in the respective businesses and do they align well?

Do client segmentation models operate in both businesses buyers and sellers — if they do, how aligned are they? What investment philosophy has each business implemented with their clients and will they be compatible and maintained? Working out the value of your business Valuing any business is always a challenging task but especially where you operate a professional services business which relies on its client list.

Understanding valuation methods The financial advisory industry has changed considerably over the last ten years, moving from a transaction-centred model in the 80s to a more client-focused, fee-based revenue model in recent times.

Understanding what numbers are of value Most buyers will be interested in sustainable, recurring revenue or EBIT, as opposed to gross revenue or funds under management. Managing the business transition Like other professional services businesses, such as accounting practices or law firms, clients develop a strong rapport with their trusted advisers. Most buyers will try to utilise their existing resources to run your business and will not require all of your staff — and even possibly you!

Chris Wrightson. Founder and CEO at Centurion Market Makers, the industry experts in the sale, acquisition and management of financial planning firms. Share this Post.

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