The Fact:
A recent industry study showed that 30% of financial advisors had purchased a book of business as a growth strategy.

The Implications:
Growth through acquisition has long been seen as a both an effective and difficult process. It is not yet widespread although there has been increased media coverage, through authors such as Sandra Foster in Canada and Mark Tibergien in the United States, on the topic of valuing a business. The value of a business is related to the quality and potential of the client base as well as the quality of the business. Going forward, advisors will have to learn how to evaluate a good business, otherwise they risk overpaying for the asset.

The Idea:
If you are buying a book of business, the difference between success and failure lies in the extent to which you have assessed the real long term value of the business and the transition process. Ensure that your contract with the seller includes a step-by-step transition plan and timeline, including joint meetings with all top clients. Retention drives value and you will need to be positioned as the best alternative once the client relationships formally change hands.

The Next Step:
The Business Success Kit provides you with the tips, tools and templates that you’ll need to enhance practice productivity and profitability. It’s the most practical and comprehensive guidebook available for financial advisors. For more information, visit www.caifastore.com and click on the Business Success Kit.