What Makes Your Financial Advisor Business Appealing to a Buyer?

Many financial advisors who are getting ready for retirement plan on selling their client book and/or their financial advising business as a whole. Fortunately, it’s a seller’s market in the financial advising industry at the moment. Up-and-coming financial advisors are eager to purchase all or part of your book of clients in order to quickly build their new business. It’s a great way to walk away from your business with some extra money for retirement and the knowledge that your clients are going to be in good hands.

The key to selling your business, though, is to make it as appealing as possible to a potential buyer. There are three key things that buyers are going to look at when considering whether or not to buy your business and how much they are willing to pay you for it. To get the most out of your business, you need to put yourself in the buyer’s shoes and consider what it is they want to find when they look at your business for a potential investment.

What Buyers Consider When Buying Your Business

The number of clients you have.

The “right” answer here is going to vary from potential buyer to potential buyer. Some buyers may not have room to take on your entire book of clients and may only want to purchase part of it. Other buyers may be interested in your business as a whole, including your office space and branding. Think about how you want to sell your business. Do you want to sell off parts of your client book? Have you built up a good brand within your community that’s worth something? Answering these questions honestly will help you attract the right kind of buyer.

How you are making your revenue.

Potential buyers want to make sure your income is as diversified as possible. If you specialize in retirement planning, do you have other areas of income? Are you getting your income primarily through commissions or do you have a healthy mix of commissions and fees? As a financial advisor, you know that diversification in your financial portfolio is important to prevent crashes from taking down your investments. It’s the exact same thing with business income.

The potential for growth in the future.

Finally, buyers want to see the potential for future growth. This may be something you’ve put in place or an idea they have that would work well with your current structure. Potential growth could also come from a strong brand that is trusted by the community and is likely to bring in more new customers. This is part of the reason it’s important to keep your marketing and branding strong while you are nearing your retirement. New clients aren’t a bad thing; they can make your business look stronger and help you sell it for more money.

The X-Factor of Buying a Business

For a lot of buyers, the business they want to buy is the one that doesn’t just look good on paper, it also feels right. Their gut instinct is that this is a good investment. There isn’t much you can do to control this part of the process. They might like your business culture, they might like your office team, and they might just be the right personality fit for your clients and they know it. Whatever it is, sometimes even the perfect business isn’t going to be right for every buyer, so be patient while you are finding a good one.

Need to learn more about selling your business and how to integrate the sale into a succession plan? Talk to the advisorRETIRE™ team. We can help you sell your business and find the right people to take over.