In 20 years of helping financial practices transition, we have closed over 3,000 successful deals–both on the open market and through privately organized transactions. Each deal is different, but we have been able to identify certain key traits and behaviors that facilitate the most successful acquisitions.
1. Build a strong business foundation
Advisors who take the time to self-assess and build (even if it takes a few years) present as a better candidate to sellers. They have ensured their business has the cash flow and capacity to service an influx of clients. Successful buyers are those willing to put in the work to prepare their business, and take care to make the transition as smooth as possible for the outgoing owner and new clients.
2. Seek out the right fit
Buyers who aim for any and all practices listed for sale are more likely to have a bumpy road with the acquisition process, and they are more likely to see a lower client retention rate post-transition. Successful buyers, on the other hand, choose their acquisition targets strategically which allows them to focus efforts on connecting with better matched sellers and absorbing growth seamlessly. By choosing assets and clients that resemble their own, a buyer has a better chance of protecting the value of their investment.
3. Engage in proper deal structure and process
Successful buyers (and sellers) often recognize the need for non-advocacy support for their transaction. Each party should, of course, have someone in their corner advocating for their side of the deal and reviewing documents. A non-biased intermediary, however, looks out for the success of the transaction as a whole and helps ensure a more smooth and timely process, resulting in greater satisfaction for all parties.
Through our Equity Management System and non-advocacy transaction support services, the FP Transitions team has helped to improve the foundations and strategies of many buyers in the financial services industry. Alex Chalekian of Lake Avenue Financial in California is one such buyer. He has completed five acquisitions since working with FP Transitions starting in 2002, and exemplifies the commitment and consideration of a successful buyer.
In the video below, Alex talks about realizing acquisition was the right growth strategy for him as well as the path and philosophies that help him complete successful acquisitions, time and time again.