The motivation to sell

If you’re considering buying an advisory practice, it’s important to gain an insight into why the seller is interested in selling.

To gain any such understanding, we will provide the buyer with useful pointers as to how they should proceed and how any potential transaction could be structured. A mutually beneficial, “fair and friendly” framework that addresses the concerns of the buyer, the seller and the clients of both should be the ultimate goal.

A seller will want to either exit the firm immediately or in stages over time. They may want to continue working with all clients, some clients or none. Each scenario presents a challenge for the prospective buyer and, if addressed effectively, can also provide opportunity and less unrest (for both buyer and seller).

The retiring adviser

According to our latest marketplace analysis, 70% of Australian practices are owned by a single principal who is fast approaching 60-plus years of age. Our research, together with our anecdotal experience gained through working with practice owners over many years, clearly indicate that in the next 10 years there will be an unprecedented number of advisers looking to sell their businesses. 

The assets these firms manage present a significant opportunity for advisers who are looking to acquire – but, be warned, the competition to acquire these firms may be intense.

Understanding the seller’s goals and concerns can be critical to the successful negotiation of a purchase (and the ultimate transition of client assets to the buyer). 

The most common concerns of sellers (in respect of a potential buyer) include: