What to consider when selling your IFA business – ValidPath

by | Feb 7, 2023

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Angus MacNee (pictured), CEO of ValidPath, outlines a five step plan for success

For most IFA business owners, retiring from or selling your business is a once-in-a-lifetime event. For some, it will be about getting as much return as possible.

For others, it will be about providing continuity for clients and staff. Thinking about the prospect of selling or retiring can bring a range of emotions ranging from dread to excitement. Regardless of your desired outcome, when you are going through this process it is important to consider five key steps as part of your exit and retirement planning. 


Step One 

You need to be clear about what is important to you. This will frame what your objectives should be and the path that may be best suited to get there. 

The decision to sell your business is likely to impact not only you, but also your colleagues, clients, industry partners and even your friends and family. Your client, staff and industry relationships may have been a big part of your life for years or even decades. Therefore, being clear about your objectives and pragmatically organising your priorities is critical. 


In summary, it is important to put plans in place to ensure that your sale or exit achieves your objectives and supports what you consider important for any other stakeholders, if indeed this is important to you. 

Step Two 

Make an honest assessment of your business and its prospects. By understanding the strengths and weaknesses of your business and identifying its opportunities and liabilities, you can develop a strategy for how to present to potential buyers, investors or successor managers. Put simply, having a realistic understanding of your business will be the foundation for approaching a business sale process. 


Step Three 

Understand your business value proposition. What makes your business unique? What makes your client proposition stand out? In any business, especially one operating in a competitive market, it is imperative to understand your differentiated value proposition. This is paramount when you are thinking about a business exit and planning how to present your business to prospective buyers and financiers. 

Whatever it may be, being able to clearly articulate your value proposition is a must to standout, attract interest and support a higher business valuation. 


Step Four 

Consider what matters for buyers or those providing the finance. Buyers and financiers have their own objectives, motivations and processes that govern how they operate and with whom they do business. So, put yourself in your buyer’s or financier’s position … what will they need to see from you for this transaction to be a viable and successful? 

As a starting point, it is worth noting that they will be focused on how you and your business fit into 


their investment or acquisition thesis. Key factors will be synergies with their preferred operating model, deal size, team strength, risk such as advice liability, profitability and value. 

Buyers and financiers will also have specific ratings and metrics that they will use to appraise and value your business including revenue, clients, FUM, profitability, growth, and liabilities, as well as operational matters such as business model, proposition, lead generation and brand. 

If you can position your business to fit with what buyers are looking for, you will be better placed to transact and on terms generally more favorable to you. Put simply, if you think as buyers think, and have what they need to undertake feasibility and due diligence, you will stand out and be in a better position to negotiate. 


Step Five 

Get your business ready for sale. When you are clear about your objectives and goals, you understand your value proposition and the considerations for buyers and financiers, it is now time to put a plan in place to get your business ready for sale. 

The place to start is to get your financial and management information up-to-date and in a form that can be shared, such as statutory accounts, management accounts, client lists, provider lists, etc. In addition, being able to evidence a robust risk management framework and compliance oversight capability directly impacts GDPR, PII, clients’ complaints, and past liability risk will impact the risk assessment and could influence the commercial valuation. 

You should also consider a transition plan to ensure a smooth handover because acquirers will value a robust business continuity plan. It is also important to have all staff, service provider and technology contracts summarised and outlining all key contracts, stakeholders and services within the business, along with having all the supporting documentation for your business critical procedures and functions. It is also worth reviewing and documenting your marketing and lead generation strategy, ensuring you have a clear brand and proven client acquisition plan documented. 

In summary, buyers and financers will need to understand the inner workings of your business as part of their due diligence and having this information available will accelerate the sale process and distinguish you as a professional operator. 


For some, the most challenging part of selling or leaving a business is deciding to do so in the first place! A good starting point is to think about the future and envisage your life post-sale and how this could be relaxing, fun, exciting or any other adjective relevant to you and your circumstances. Then, when it comes to the actual process of planning your business sale or retirement, by considering these five steps hopefully you will be better placed to take the next steps and achieve your desired outcome. Start with the end in mind… that is exciting. 

Angus MacNee, CEO of ValidPath

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