Selling an advice firm is a big decision and can often be a complex and drawn-out process. But reviewing the following areas prior to any acquisition discussions can help smooth the ride and lead to greater success.
Culture: Not only is having an appropriately client-centric culture a regulatory requirement, it will also be of interest to potential acquirers. Having a thorough understanding of your internal culture and how it manifests itself throughout the organisation will help you demonstrate both the value of the business and its commitment to regulatory obligations.
Policies and procedures: Policies must be tailored to your operations and be supported by a full suite of procedures, with appropriate controls in place to ensure they are followed.
Recordkeeping: Ensure your recordkeeping is accurate and up-to-date, as any gaps in documentation can raise concerns about the adequacy of your systems and controls.
Management information: Review your MI reporting structures through the eyes of a potential acquirer. Does your MI provide evidence of effective governance and compliance, as well as strike an appropriate balance between commercial objectives and client outcomes?
Quality of advice: An independent assessment of the quality of your advice files provides the assurance your firm is delivering robust advice and meeting regulatory expectations in this area. Undertaking this prior to any potential acquisition also enables you to address any weaknesses or failings before embarking on a formal due diligence exercise.
Phil Deeks is technical director at TCC