Bankhall is urging business owners who are considering exiting the industry and looking to sell their business to give themselves a two-year timeframe.
At an adviser seminar in Edinburgh hosted by online DFM forum Discus, Bankhall’s head of bespoke solutions, Linda Preston-Todd, said firms continually underestimate the work involved and the steps required to prepare their business for sale.
Ms Preston-Todd said: “Many business owners are deeply involved in the day-to-day operation of their firm and conducting meetings with clients."
She said this was "completely understandable", but warned that exit planning which is left to the last minute can be detrimental to the firm’s interests.
“An unplanned exit can look rushed and in some instances desperate, which can in turn reduce the value of the business," she said, advising firms to include an exit strategy within their long-term business plan.
"By making this an objective and reviewing it on a regular basis, firms will ensure they are on track to achieve their long-term goals. This includes encouraging sustainable business growth and managing risk in readiness for future sale.
“Planning as early as possible, but at least two years in advance of sale, will ensure the business structure and customer base are in good shape, and all the necessary compliance and regulatory requirements have been met.”
An unplanned exit can look rushed and in some instances desperate.Linda Preston-ToddLast week, research from Nucleus revealed that more advisers are looking to sell their businesses to internal management when they retire, as the platform launched a guide to help advisers prepare an exit strategy.
Gillian Hepburn, director of Discus, said: “The options for an exit strategy and the preparation required for this are firmly on the agenda for many financial advisers.
“One of the many considerations is the impact of the investment proposition on any valuation and the views on whether this should be consolidated on a platform are mixed.
“There appear to be tensions between the business benefits of consolidating in platform model portfolios managed by discretionary managers or by placing investments ‘off platform’ in the nominee of the discretionary manager.”
emma.hughes@ft.com
