Posted on: 24 July 2012
SimplyBiz Group respond to ‘scaremongering’ surrounding pre-RDR IFA business sales
Antoinette Duffin, Head of the SimplyBiz Group’s Capital Reward Plus division, has responded to recent articles which have claimed it is too late for IFAs to profitably sell their businesses before the implementation of the RDR. Ms. Duffin, whose responsibilities include management of the Group’s Practice Buyout scheme which introduces advisers leaving the industry with those interested in making acquisitions, believes that there is still time for IFA firms to prepare their business for a mutually beneficial sale.
“Of course, in an ideal world, I’d advise anyone wanting to sell their business – in any industry – to give themselves as much time to prepare as possible, however, if advisers are trying to make a sale before the implementation of the RDR, it’s not the case that their window of opportunity has closed. I’ve seen legacy payments referred to as an issue which could be detrimental to the sale of an advisory business, but most reputable buyout schemes will have pre-prepared legal agreements ready to be used. The part of the deal which can actually be most problematic for advisers is the human angle; finding an adviser that they feel they can trust to look after clients with whom they’ve spent years building relationships. The acquiring adviser can prove the sustainability of their business, level of qualifications and the fact they’re compliant in black and white – finding a successful personal connection can be much less tangible and, as a result, can take longer.”
Ms. Duffin also believes that the recent spate of articles about the difficulties of selling an IFA business could actually discourage those who are yet to start the process:
“The figures that have been in circulation about the number of advisers who will leave the industry as a result of the RDR may be an underestimation, in my opinion. Those figures relate to those advisers who have accepted the fact that retirement is the most viable option for them in the post RDR world; experience tells me that fear has created apathy in many more advisers who know, but do not want to accept, that this is the only real path for them. I would urge advisers not to be disheartened by stories in the media about the disadvantages of beginning to prepare for a sale at this stage. Whilst they need to take action sooner rather than later, it is definitely not already too late for them.”