Key selling points
If you are tempted to sell, being level four qualified has not been a waste of time. If you prepared for the RDR, a potential buyer will be confident your firm came on the journey with you and will not present a potential liability.
Recurring income generated by commission was previously used as a key selling point when it came to estimating a firm’s turnover and profits. The shift to adviser charging has created a number of different fee models so a firm looking to be bought must keep carefully audited books, pinpointing everything from retainers to one-off fees.
A potential buyer must know the inherent value of a client book, assets under management or administration, introducer fees and client retention rates. These will all be taken into consideration when a valuation is conducted.
All adviser firms face challenges in the RDR world, and there will be more that cannot survive. But those that are determined can thrive: they can build a successful business, groom themselves for growth or a sale, and win, whatever path they choose.
Stephen Hagues is founder of Retiring IFA.