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Clients must come first during acquisitions

Marlene Outrim

Marlene Outrim

Our company recently completed its second acquisition in about 12 months. 

Both completions went smoothly, from the start of negotiations to the actual completion day, although I envisage the journey in the next 12 months with thislatest company might be quite different from the first one.True, we have far more experience now and many lessons were learnt along the way. But it was interesting – at times challenging – to see how differently IFAs operate and run their businesses.

It is not always possible to look under the bonnet when negotiating an acquisition, even though you obtain as much information as possible. Numbers are readily supplied in the usual format: Excel spreadsheets giving a breakdown of clients, portfolios, fees and providers. The accounts and projections can often be produced by an accountant or someone not actually giving day-to-day advice.

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Some advisers can be reactive with clients, only responding to their specific needs and requirements; others will be more proactive and give direction when needed. The thing is, how do you discover this information unless you shadow an adviser before completion? To me, this information is so important, not only if the adviser is remaining with you, but also to know what the clients are used to and how their expectations can be managed.

While the buyer and seller might be happy with the agreement, it is the clients who must suffer the consequences of any mismatch. Quite understandably, they might feel aggrieved at getting someone or something they did not sign for.

Having your business sale ready, with all the processes and systems in place, is a good practice. But remember, signing on the dotted line is only the beginning, not the end of a deal, especially for the clients who have probably no idea how their relationship might evolve with the new company. 

Preparing clients for the sale along the way is crucial if there is to be a successful handover, so focus not only on the numbers but also on the people too.

Marlene Outrim is managing director of Uniq Family Wealth