Your IndustryAug 11 2022

Maximising the attractiveness of your firm ahead of sale

  • Explain how to prepare business for sale
  • Explain how to get technology systems into shape
  • Understand how to create strong cyber security procedures
  • Explain how to prepare business for sale
  • Explain how to get technology systems into shape
  • Understand how to create strong cyber security procedures
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Approx.30min
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CPD
Approx.30min
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Maximising the attractiveness of your firm ahead of sale
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He added: “You need to be able to access information that it would be expected you can provide, particularly around distribution of funds between different platforms, DFMs and so on.”

Acquirers expect firms to hold (and be able to easily access) up-to-date information from board minutes, governance documents and terms and conditions to management accounts and client segmentation processes. 

The tech ecosystem as a selling point

Much of this comes down to how well the firm’s systems are working, including practice management solutions, and the firm’s ability to maximise the benefits of the technology at its disposal. Acquiring firms may be interested in Intelliflo’s eAdviser Index, which measures our customers’ business metrics against their use of Intelliflo office. 

The most recent version found that ‘champions’ – firms that maximise their use of technology – generated 44 per cent more revenue and 59 per cent more ongoing revenue per adviser and have 28 per cent more clients and 48 per cent more assets under advice than ‘explorers’ – firms that do not yet fully use all the functionality available.

Evidence of systems and controls – from a governance as well as a performance perspective – is increasingly central to the due diligence process that buyers will carry out. Whether the acquirer will continue to use the same providers and processes or migrate to its own preferred systems is a question for the selling firm to consider too, given the implications for clients.

Sustainability is also about resilience. More than ever, this means protecting the business against cyber security threats. 

Similar considerations will apply to centralised investment propositions and the various investment-related arrangements in place. The technology ecosystem and the options available – in terms of customer relationship management systems, tools, software and platforms, for example – may well have a bearing on the perceived value of the firm. 

Being able to evidence effective integration and a clear understanding throughout the firm of how to get the best from the technology available will make a difference too.

For instance, a selling firm able to demonstrate how true two-way integration enhances the firm’s efficiency (and so gives advisers more time to add value for clients) has a stronger case for the longer-term profitability and sustainability of the business. 

Demonstrate robust cyber security 

Sustainability is also about resilience. More than ever, this means protecting the business against cyber security threats and reducing its vulnerability to breaches that could have profound ramifications for its ability to function.

There is a governance aspect here as well as a business performance angle. Being able to handle and process client data properly helps maximise efficiency, streamline the advice process and bolster productivity.

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