For many IFAs, the decision to sell your firm is one of the most significant choices you’ll ever make. Selling to a larger firm can offer both financial security and operational stability, or simply allow you to enjoy some well-earned rest in retirement. But how do you know when the time is right?
David James is Commercial Acquisitions Director at AFH Wealth Management, a firm that has been successfully acquiring IFAs for more than 20 years. Here, David shares the key signs that it might be time to sell…
You’re struggling with regulatory burdens
One thing IFAs can’t fail to have noticed over recent years is increasing regulatory pressure, most recently in the form of Consumer Duty. Compliance costs and time-consuming reporting processes can feel overwhelming, particularly for smaller firms. If you’re noticing that regulatory challenges are taking up more of your time than advising clients, joining a larger firm with dedicated administrative and compliance teams could free up your time to focus on financial advice.
The end of the tax year is filling you with dread
It’s no secret that many advisers find themselves drowning in work as the end of the tax year looms. If year-end pressures have become increasingly stressful and difficult to manage, it could be a sign that you lack the capacity or infrastructure to handle busy periods effectively. Larger firms often have bigger teams and streamlined processes that can ease this burden, allowing you to focus on financial advice rather than getting your admin sorted.
Your costs are becoming unmanageable
Like many industries, the cost of running an IFA firm has risen sharply in recent years. With inflation driving up anything from wages to new technology, increasing NICs on the horizon, and new regulatory requirements adding to operational expenses, smaller firms could begin to struggle. Selling to a larger firm can provide relief by giving you access to shared resources and economies of scale that reduce costs and improve efficiencies. Of course, the money you’ll receive from selling will also help!
You’re finding it difficult to keep up with your clients’ demands
Whether it’s a smooth digital experience or a broader range of services - such as tax planning, trusts and estate advice, or investment management - today’s clients demand more bang for their buck. If your firm lacks the resources to keep up with these expectations, whether due to limited technology, staff or infrastructure, selling your firm could enhance your clients' experience with you.
Growth is becoming ever harder to achieve
Organic growth in the financial advice sector isn’t easy. Finding new clients can be difficult, particularly with rising competition and market volatility. If you’re finding it difficult to grow, and bring new clients into the business, selling to a larger firm would not only give you access to more resources, and offer your clients a wider range of institutional investment funds, including discretionary management, it would also free up your time so you can focus on taking your business to the next level.
Selling your firm could improve business continuity
Sometimes, the stability of your business can be out of your hands. Unexpected events such as economic downturns, regulatory changes, illness or key staff departures can have a major impact on a smaller firm’s ability to operate effectively. Being acquired by a larger firm provides a stronger foundation, with greater financial backing, a larger support network and contingency planning that can help safeguard you, your clients and your employees.
You’re ready to enjoy a well-earned retirement
Through blood, sweat and tears, IFA firm owners have spent years building their businesses, working long hours to serve their clients. But at some point, personal priorities change. Whether you want to travel, spend more time with family, or simply enjoy a less stressful lifestyle, selling your firm can give you the financial security and freedom to retire on your own terms while knowing your clients are in safe hands.
Succession planning is becoming a challenge
For those IFA firm owners who are looking to retire from the industry, finding the right successor within the firm isn’t always easy, especially if younger advisers in the firm aren’t interested in business ownership. If you lack a clear succession plan, selling to an acquirer ensures continuity for your clients while allowing you to exit on your own terms. Some deals will give younger advisers the opportunity to join the acquiring firm as an employee – offering them a chance to grow their career and continue to serve their clients.
Don’t miss out!
Selling your IFA firm is a deeply personal decision, but recognising some of these signs can help you determine whether now is the right time.
The current market for IFA firms remains strong, with consolidators offering competitive multiples for well-run businesses. Now just might be the right time to sell while valuations are still high. Waiting too long, particularly in uncertain economic times, could mean missing out on the best possible deal.
David James
Commercial Acquisitions Director
David is AFH Wealth Management’s Commercial Acquisitions Director and is responsible for meeting with IFAs who are looking to sell their business, whether they intend to retire or to join AFH and continue advising their clients. This includes maintaining contact once an IFA is in the due diligence process through to ensuring that both clients and adviser enjoy a smooth transition. David brings with him over 25 years of experience within financial services having been an adviser himself and having worked within a variety of management and development roles. He particularly enjoys the variety of work that his position delivers, and he holds firm values regarding culture, holistic financial planning and building strong enduring relationships which support him well in this role.
About AFH Wealth Management
Guided by Chartered Financial Planner, Alan Hudson, for 35 years, we focus on delivering what money can’t buy - experience, trust, and exceptional client care. With decades of experience and a team of dedicated professionals, we’ve created seamless systems designed to ensure a smooth transition for acquired businesses and clients, preserving what matters most every step of the way.
Here at AFH, you’ll be in the safe hands of our experienced acquisitions team: a group of seasoned professionals dedicated to helping you sell your business. With a deep understanding and a strategic approach to identifying opportunities, our team works closely with you to align to your unique needs. Our team ensures a seamless transition for advisers while preserving the value and integrity of their practices. We take the time to understand each business’s unique strengths and goals, crafting tailored solutions that benefit both the advisers and their clients. By partnering with us, financial advisers can trust in our expertise, professionalism, and commitment to making the acquisition process smooth and mutually rewarding.
Wednesday 5 March 2025