SW: given your vast experience, when it comes to supporting adviser businesses in the way that you do, what does good look like?
KB: For us, it’s important to get the right match in the first place. The statistics for the market at any given time is that maybe 20% are thinking about selling or retiring at some point – that’s just the demographics of the industry. With the average IFA business owner aged around 58, there’s always a constituent demographic that’s thinking about succession planning at some point in time, and we have to look at what that really means. So, if you want to look after a client for the future, for example, you have to consider very simple things like the investment proposition: What has the client been working on with their financial adviser for the last 10 or 15 years since they’ve been a client? What’s the experience going to be afterwards if that planner retires in the next year or two? Are those interests aligned?
It’s the same with charges: there are many different ways of charging clients. There are also different ways of servicing clients, with digital services coming in as well. We take a detailed look at all of that, on both sides, so that when we’re talking to a client who wants to buy, we spend a lot of time really understanding what’s important to them. We explore what their red lines are – not just in terms of geography and size or what they are hoping to acquire, but in terms of what integration will look like. What does that journey look like for the planner, staff, and clients? What are their expectations?
Equally, when we engage with someone who wants to sell, we’re essentially asking them the same questions. What do they do currently and what is the expectation afterwards? What do they want out of this deal? Do they want to stay for two or three years and gradually wind down and hand clients over? Do they want to retire and leave tomorrow and go and sit on a beach somewhere nice? Both are perfectly reasonable expectations, but it’s about understanding these expectations and then finding the right match.
It’s about taking the detailed in-depth analysis that we’ve done and the fact-finding that we as IFAs are so familiar with. We ask those key questions and match them together to try and put people in contact who are at a point of what we believe to be real value: a position in which the client, seller and acquiring firm can all get what they want.
That is what we try to bring to the table. It’s about being very open and honest with people and saying, look, this is what we do and this is the process we go through; there’s quite a lot of work to engage in and everyone has to commit time and effort to it. It’s not easy. It’s not quick. We really want to gain a deep understanding so that when we go forward and have meetings and make introductions, we can be sure that they are the right introductions at the right time.
Then it’s about the transition; we focus a lot on transition plans as we are used to managing them. There are different ways of buying firms, but I won’t get into the technical details around share purchase and asset purchase today. That’s a whole other subject we could talk about. But depending on the type of deal and type of structure you’re dealing with, and again that will come down to our due diligence on both sides, we know exactly what has to happen.
I remember having a list. We used to run a project plan on the list and we’d think things like, ‘oh, at some point we’ve got to change the voice message on the phone’ because we were going to rebrand. And then we’d remember that the Franking machine has a logo on it, and you have to get a new logo for the machine as it’s changed. There is an endless list of little things, and big things, that need to happen.
We’re very keen to work with parties and to reassure then that not only do we understand all the things involved, but that we actually have a plan. We might be involved in a transaction for two years, so there might be a two-year transition plan. It isn’t simply an introduction and then we just get on with it. We say, let’s work through it and let’s understand what the deal is going to be and what needs to be done to help the deal actually happen. Being successful is all about the transition plan and everyone must play their part along the way. That means helping both parties and facilitating calls and meetings etc. We will go through all the steps; we plan and make sure that we’re always there with our clients throughout the journey. This comes back to what we said earlier – that we want a good outcome – and a good outcome comes from hitting all those triggers along that journey.
Of course, that means that we need to break down what a good outcome is and what needs to happen in order to deliver it. We are part of that journey and it could mean a year or two-year transition plan. We work with our clients all the way through the process and hopefully, as a result, we help them to achieve the outcome they want.
About Keith Brown, CEO, Wealth Holdings
Keith is a performance-driven individual and likes to drive change, working collaboratively as part of a team. He is an experienced financial services professional having worked in the sector for over 28 years as a Planner, Business Owner, Managing Director. Keith has held senior management and board positions including Group Training Director, National Operations Director and Head of Business Development for one of the fasted growing independent wealth management companies in the UK. He has worked as part of a team to complete over 50 acquisition and integration projects, and has had strategic responsibility for planning and implementation of integration activity and processes.