Comparing offers beyond the headline price
Questions to ask about each buyer’s plans for your clients, alongside the price.
Questions to ask about each buyer’s plans for your clients, alongside the price.
If two offers are a tenth apart and you would not want your own family advised by one of the firms, take the other offer. Decide this before you are in a completion meeting with an offer in front of you.
A higher offer can come from the same plans that would make it worse for your clients.
A buyer who plans to move every client onto their own service, platform and fee basis can forecast more revenue than one who plans to leave things as they are. They may also be building scale for a sale of their own in three years, in which case they are paying for your client count.
The price may therefore depend on plans you do not share, and the effects show after you have gone.
Ask what each client’s experience will look like in three years. In particular:
Ask the last question carefully. A buyer with a five-year investment cycle may sell your clients on in a larger transaction, and the decisions will then be made by people who are not part of today’s negotiation.
Put the things you care about into the documents. Verbal assurances about continuity given in a meeting are not binding. If a fee basis, a servicing standard or the position of a member of staff matters to you, put it in writing alongside the price.
Decide how much of the price you would give up for the right buyer. Taking ten per cent less for the right buyer is a reasonable position. Decide it before the offers arrive.
How to write down the client knowledge that is not in the file, so the next adviser can use it.
Read it
Cutting to three days a week reduces your advising time. The work of running a regulated firm stays the same.
Read it
How to record why you did not recommend the obvious alternative, in four lines on the file.
Read itSteven Bates, Director of Advisory at Equity & General, takes the first call with every adviser. Ring him on 020 8396 0486 or send a short note about your firm.