Advice firms have a responsibility to their clients on whether to sell or not
When it comes to home ownership, from the moment you step onto the property ladder you are banking on the fact your home will go up in value, simply by virtue of you owning it. It is baked into the public’s consciousness that the price of their home will rise, despite peaks and troughs and financial crises that paint an alternative picture.
With the valuation of advice businesses, it is altogether different. Yes, advisers will assume their firm is worth a lot, but what they are selling is their life’s work, so it stands to reason it should command a just price.
There are carrots being dangled all over the place to encourage advisers to choose particular buyers. Acquisition announcements often boost of six or seven figure sums at the outset, but whether these actually materialise is questionable.
Advice firms must undertake the same due diligence they would were it any other relationship that was significant to their business. Stretching the housing analogy further, an estate agent may blind an owner with talk of sky high prices but this is immaterial if a deal cannot be done. The same is true for advice firms: a sale agreement should go beyond the price tag to look at cultural fit, both for clients and existing staff.
News from us
Money Marketing has had a busy week. We were honoured to be named financial B2B title of the year at the recent Headlinemoney awards, with Money Marketing praised for the quality of its news and its thought provoking content. We also hosted our flagship Money Marketing Interactive conference in London, which saw hundreds of delegates attend the event with speakers including the Financial Ombudsman Service, the Financial Services Compensation Scheme and BBC Money Box’s Paul Lewis. Thanks to everyone who made it along and for contributing to the debate.
Finally, this week we also launched our new website which is all about helping advisers find the content they are after much more quickly and easily. As well as being home to our big name columnists, one of the new features is as an editorial team we can signpost you to the articles that we think you might find interesting, plus the news and analysis that can help you run your business. It would be great to hear what you think.
A big thank you to advisers, readers and advertisers for your continued support.