Just over a quarter of IFA business owners (27 per cent) plan to sell in the next five years, according to Harrison Spence Partnership, although more than half (51 per cent) have no plans at all to exit their business.
The independent financial services consultancy surveyed more than 300 advisers in February, finding that 6 per cent are ready to sell within the year and 7 per cent within the next three years.
However, decisions to sell seem to have been put on hold compared to six months ago, when 45 per cent planned to sell within five years and 37 per cent had no intention of selling at all.
Brian Spence, the firm’s managing partner, said that only 13 per cent of the advisers surveyed plan on selling in the next three years, despite valuations having risen by as much as 25 per cent over the last six months.
“While it’s encouraging that so many want to continue running their businesses, it is also likely that many haven’t considered their options yet,” he commented.
“Much of an adviser’s work is about getting clients to think about the longer term and plan ahead. I would urge business-owners to take the time to do the same for themselves -without delay.”
Just under a third (31 per cent) are aiming to retire completely, with a further 11 per cent looking to retire from the industry to start a new career and just 5 per cent looking to start a new financial advice business.
However, the research suggested that with more than half of sellers looking to continue to work for any acquiring firm for a transitional period or for the long term, making the right choice of acquiring firm is crucial.
In terms of those thinking of selling, the majority favour a regional firm (34 per cent) or small local IFA (27 per cent) over a large national acquirer (18 per cent). A wealth manager or other ‘vertically integrated’ business was also an option for 21 per cent of respondents.
Mr Spence added that in business its always helps to have a ‘destination’ clearly in mind.
“It really is a seller’s market today and prices may rise further as competition for high-quality businesses grows.”
peter.walker@ft.com
