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The Key to Getting Through an Acquisition is Preparation

Acquisitions are a great way to grow your financial practice. They allow you to scale quickly and immediately generate revenue from the new book of business. For many practice leaders, acquisitions are not part of their regular routine and the demands of the process can create challenges before, during, and after the deal. That’s why the key to getting through an acquisition is preparation. Preparation entails leveraging acquisition resources, having a clear plan, and gathering the necessary documents and information that will help you get through the financing process quickly.

Leveraging Acquisitions Resources

When doing business tasks outside of your realm of expertise and experience, it’s always smart to hire an expert. Whether leveraging an outside acquisition consultant or utilizing your broker-dealer or custodian’s in-house succession team, it helps to have a seasoned and knowledgeable professional working on your behalf. A common saying is “you don’t know what you don’t know.” An experienced acquisition consultant knows the challenges and opportunities of an acquisition and can help you navigate the legal and regulatory considerations that can influence the structure of a deal.

Having an Acquisition Plan

When pursuing any business initiative, it’s important to have a plan. Your acquisition plan should include strategies for managing the seller, leveraging current client facing staff, and for transitioning clients. It’s also important to know and understand how a practice is valued so you can determine if it is a sound investment.

Collecting Your Primary Documents

Nowadays, most financial advisor acquisitions are financed through bank loans. Whether you choose to go with a conventional or government guaranty loan, you will be required to provide a number of key documents. This includes but is not limited to tax returns, a business plan, financial statements, and credit reports. Your lender can work with you in advance to start collecting the necessary documents even before you have a prospective business to purchase.

The earlier you start preparing, the more time you have to do it right. Because there are so many things to consider during an acquisition, we developed a free guide that walks you through the entire process, from finding a book of business to purchase, to transitioning clients to your existing practice.