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‘Retiring proprietor is key to success’

Amy Ellis

In the post-RDR world where mergers and acquisitions of adviser firms may be set to increase, Stephen Hagues, managing director of North Yorkshire-based Retiring IFA, said that the exiting owner of a newly acquired firm can be a hugely valuable asset – or a total liability – to a firm’s success.

Mr Hagues said that as well as being a leader, the retiring proprietor is a skilled technician and keeper of a “gold mine of opportunity” for advisers in terms of the years of goodwill and the solid relationships he has built up.

He added: “The main thing is to be able to harness the retiring proprietor as an adviser, so actually introduce and leverage a lot of the goodwill. Without the goodwill, the relationship with the existing adviser is very similar to just buying a bank of data.”

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Mr Hagues said it was particularly important to leverage the permission and goodwill that existed between the retiring adviser and the clients.

He continued: “Often that is a very valuable thing. If someone has been advising you for 20 years and turns around and introduces you to the new adviser in a professional way, that can make all the difference.”

Mr Hagues added that the handover period was almost like a job in itself: “It is not just about the handover, but agreeing the handover and exactly how many introductions and over what time period and how many joint meetings. How that is done is ultimately going to affect the value that is transferred.”

Keith Richards, distribution and development director for Tenet, agreed that as well as obtaining a fair price for their business, most advisers’ key priority is the ongoing service for their clients.

He added: “For many, they have spent a lifetime doing their best for them and often developed personal friendships and this is where selling becomes a much more emotive issue; finding the right buyer can be more about who will continue to offer their clients a first-class service.

“Planning is everything when it comes to selling an IFA business and those prepared to do the research are more likely to select the right support mechanism to get them their ideal match and the rewards that their years of professional labour will have created.”


Simon Redhead, managing director of Birmingham-based Wealth Solutions, who acquired a client bank from retiring adviser Sandra Urquhart last year, said: “In terms of our due diligence, it is absolutely crucial that we have commonality, similar values and integrity in line with the seller. I’m a firm believer that clients will largely reflect the adviser. Therefore if you don’t connect with the adviser and don’t feel they care about their clients, then you can’t expect a huge amount of loyalty from the client following acquisition. To hand over the client relationship we insist on the seller remaining as part of the new business. Some clients won’t need their hands holding but many will for a period of time and you don’t want them simply feeling they’re a commodity to trade at will. As soon as you can you want the clients to buy into your brand, service and processes, but with a human touch around it. People still buy from people they trust.”