A major concern for any selling IFA is what will happen to your clients? Clients are often lifelong friends or acquaintances, and you will no doubt want to know they will be taken care of by the acquirer once you have exited the business. Many vendors worry their clients will no longer receive the same service and advice they are used to receiving, but is this really likely to be the case?
Will the Acquirer prioritise your clients?
It may seem like prioritising clients is purely within your own interest. However, all parties involved in an IFA acquisition have strong incentives to ensure your clients are kept satisfied! Clients are the lifeblood of an IFA business and without them, the business will never thrive. It is therefore within the best interests of all parties involved in an acquisition to take care of your clients.
Will the acquirer expect my clients to move to their CIP?
One of the biggest concerns for a Vendor is if the Acquirer is going to shoehorn their clients into an unsuitable Centralised Investment Proposition. Fortunately, Acquirers often offer open architecture when acquiring an IFA business to allow clients to remain on existing mandates. However, in many cases, moving clients to a CIP can actually be in their best interest!
Many Vendors want their clients to continue receiving tailored advice to suit their individual circumstance which a CIP may not seem to be able to provide. But in recent years, CIPs have improved, becoming more reliable and less restrictive. A robust and well-developed CIP will deliver consistent service whilst still providing flexibility to allow Advisors to tailor investments in line with individual client needs. A strong CIP can communicate to clients that a considerable amount of time has been devoted to ensuring they receive the best possible recommendations free of bias. They ensure transparency and a uniform standard of service regardless of client location. CIPs can also have a variety of other benefits including a greater compliance with consumer duty due to the highly disciplined investment process, as well as reducing costs meaning clients can negotiate better fees.
So, whilst your Acquirer is likely to offer open architecture, it can be beneficial for your clients to be moved to a Centralised Investment Proposition! Trust that your Acquirer is acting in your client’s best interests if they suggest moving them to their CIP.
How do you know the Acquirer will be the right fit for your clients?
The key to ensuring your Acquirer will be the right fit for your clients is to make sure your businesses are well aligned. A well aligned business culture and proposition will ensure the successful continuation of established client relationships, securing client satisfaction. Your broker can help with this! Utilising a reliable, well-experienced broker will help to ensure you and your Acquirer are well aligned right from the beginning of the process. Their expertise will enable them to properly assess the fit between businesses, avoiding any shoehorning or unhappiness on all sides. To read more about successful business alignment, click here!
Conclusion
It is within the best interest of every party involved in an acquisition to ensure your clients are satisfied and cared for. It is unlikely they will be shoehorned into an unsuitable CIP, particularly as Acquirers often provide open architecture to allow the continuation of existing mandates. However, CIPs can be beneficial to clients with access to highly qualified fund managers and experienced investment committee, plus benefitting from economies of scale! Keep an open mind when beginning the acquisition process and consider carefully what will benefit your clients most, ensuring they are well cared for once you have exited the firm!