Acquiring an advisory business – getting it right

By Jo Gilbey
Find me on: LinkedIn 13-Nov-2015 11:53:00


With up to 70% of all acquisitions failing to deliver lasting and long-term financial benefits to the acquiring firm, what steps can you take to get it right?

The acquisition of another financial intermediary by a financial planning firm is often seen as a ‘coming of age’ and a manifestation of a successful business. Yet a significant percentage of acquisitions fail to deliver the financial returns anticipated. A commonly quoted statistic is that up to 70% of all acquisitions, not just those in financial services, fail to deliver lasting long-term financial benefits to the acquiring company.

Despite the risks inherent in buying businesses, the pace of acquisitions and consolidation within the financial intermediary sector has been relentless in the two and a half years since the RDR. One only has to read the trade press to see the evidence.

At face value, acquirers appear to be making successful deals and the principals of the firms who are selling their businesses are receiving substantial sums for their labours. Is this actually the reality?

Fast forward a few years and will the acquirers still be happy with their acquisitions, and in particular will they have successfully integrated the business (es) that they have bought, have they retained the advisers and staff, and have they achieved their financial and strategic objectives?

The full paper (one of a series on areas of interest and relevance to financial intermediaries), seeks to explore some of the less discussed but important aspects of buying and integrating a financial advisory business. It also identifies some of the potential stumbling blocks and issues, and suggests ways how they can be contained and managed to increase the likelihood that the transaction succeeds both in the short and longer term.