Financial Advice Client Base Transactions
Advicebridge is brought to you by Kurt Owen and Russell Hutchinson with the intention of benefiting both buyers and sellers of financial advice client portfolios and businesses. Our focus is to bridge the gap.
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For buyers we help you by
Providing regular updates on market conditions
Working with you to establish your acquisition goals and strategy
Learning your purchase criteria, so we don’t waste your time
Connecting you to deals that meet your criteria and help you execute those quickly
For sellers we help you by
Providing up to date information about the market for client bases
Helping you to establish your priorities for your client base sales
Identifying whether this is a client base or going concern transaction
Bringing the right people into the transaction team – including a licensed agent where that is required
Helping you to optimise the preparation of your business for sale
Advicebridge Limited (Advicebridge) combines accounting knowledge with life insurance expertise to offer a service that is supported by a chartered accountancy business and years of experience handling valuations and transactions.
What we do
Advicebridge operates to offer both buyers and sellers an opportunity to connect and transact. By following set processes, we work to connect a seller with the right buyer from our database of buyers. Our goal is to connect interested buyers and sellers by coordinating the buyer selection process and the interactions between all parties.
For sellers, Advicebridge operates on a fee for service basis, scaled according to the value of the transaction.
Click here to view our fee schedule
Selling
There are lots of reasons to sell. Whether you have a group of clients that have relocated and you can offer them to someone in their region, or you want to leave an advice segment, or simply enjoy the fruits of your labour and retire from the industry, Advicebridge can help.
Advicebridge is familiar with the market for client bases, the law around their sale, and the sale of going concerns, and the ways buyers evaluate these opportunities.
Optimising your sale process is usually a question of understanding your book and finding the buyer who would most value that opportunity. A market process tends to put you in touch with more people and ensure the best price.
Buying
If you are looking to grow your client base, expand your business geographically, or boost a segment of your business up to economic scale, Advicebridge can help. Allow us to bring you opportunities from outside your network of contacts.
Advicebridge maintains a database of interested buyers. These buyers are assessed against a set criterion. If you are an interested buyer who meets our set requirements, we will get in touch with you once a suitable client base is presented for sale.
Email or call to talk about current market opportunities.
Click here for further contact options
Experience has shown us that in some cases our clients may have specific ideas about the clients/portfolio they would like to buy. This can be as specific as the name of the broker or adviser concerned. We are happy to approach them directly, but without declaring your identity. We have found this process to be successful in many cases.
Are you looking to buy a client base?
Transaction trends
Through valuation work over the last fifteen years we have maintained records of transactions, a summary of their particular features, and the prices that they commanded, usually expressed as a multiple of renewals. In the last two years we have worked to improve the quality of that information. In doing so we have offered consultancy on sale and purchase terms, agreements, staff share schemes, and mergers. The more work we do in this area, the more information we gather – expanding the network of people who know of our interest and help provide information. We exchange details of recent transactions with all those that help us to build a better picture of the marketplace. That exchange is available to you and to your business development teams.
Increasing interest
Recently there has been a lot more interest in valuation. Although the general assumption is that prices will crash as many advisers head for the exits we have seen a far more balanced picture emerge. Valuations are usually the starting point for the following business changes:
Sale
Family buy outs – e.g. children taking over
Succession planning – e.g. considering options
Staff share schemes – e.g. for motivating associate advisers
Bank lending – e.g. buying another book, security, also used for intergenerational transfer
Transferring shares into a trust
Shareholder/partnership disputes – e.g. buy me out
Divorce/separations – expert witness e.g. separation need to pay a partner
What type of seller are you?
The ‘early retirement’ seller
Making a choice to enjoy the fruits of your labour and exit rather than sustain increasing compliance costs and risks.
The ‘joiner’
An adviser who may prefer joining a Financial Advice Provider which will take care of their compliance requirements.
The ‘merger of equals’
Two advisers with similar businesses may merge to achieve scale in the face of rising compliance costs.
Two dissimilar adviser business may do the same, and also gain the advantages of specialisation and referral.
The ‘intergenerational transfer’
A fascinating deal – because of the family and power dynamics in play. An objective market view may be needed.
Business expansion
The expanding business that offers shares to staff or leading associate advisers is also a seller, a circumstance that often requires different approaches to valuation to incorporate intellectual property or opportunity.
Current factors affecting valuation
What changes value in the market may differ from what would change your own individual assessment of value for a specific deal that you are contemplating. Beware of the impact of personal bias when assessing a deal. The lists below give you a general idea of the issues affecting valuation in the market.
Positives
Full sale
Retiring
Staying in business - with purchaser
Good data
Few agencies
Non-personal brand
Large agency
High service commission model
Negatives
High age spread
Part sale only
Staying in business, same area
Staying in business - moving out of area
Poor data
Many agencies
Not full vesting
Distressed
Remote area agency
Lower persistency
Very low persistency
Future factors affecting valuation will largely remain the same if the transacted property is merely a renewal. Although there is a strong desire for a purchaser to avoid undertaking advice risk, product providers and sellers would prefer that a buyer accept risk and inevitably, some will buy on that basis, for much the same reasons that sometimes they buy limited companies today. A purchase including a FAP would include consideration for:
Record-keeping
Past and current complaints
The ongoing advice service offered to clients
Systems and administration of them
Complaints history and current issues
The current status of adviser employees
Much more extensive warranties
A risk-based approach to valuation based on advice given
Pricing
Fee schedule
| Sale Price | Commission rate (excluding GST) | |
|---|---|---|
| > $50,000 | Flat fee $7,000 | |
| Over $50,000 and under $100,000 | Flat fee $9,000 |
| For each sale dollar | Commission rate (excluding GST) | Cumulative cost (excluding GST) |
|---|---|---|
| $100,001 – $250,000 | 8% | 20,000 |
| $250,001 – $500,000 | 7% | 37,500 |
| $500,001 – $750,000 | 6% | 52,500 |
| $750,001– $1,000,000 | 5% | $65,000 |
| > $1,000,000 | 4% |