TRANSITION TALK

Acquisition strategies are varied and diverse; how an advisor or a firm pursues acquisitions will depend on their business model and philosophy. While the approach to acquisition should be personalized, it is a mistake to do it alone. In addition to the successful transactions presented in this report, FP Transitions works with many advisors who have endured failed sales or stalled deals.

The story of a failed transaction often begins with one or both parties hesitating to hire a mediator, the perception being that their deal is “simple,” and that buyer and seller can save money if they do it themselves. The information we gather from these clients about their failed sales gives our consultants broader perspective on what works and what doesn’t in an evolving marketplace. When we combine this information with the data gathered from successful deals, it is clear that investing in a mediator improves results for both buyers and sellers in terms of success rate, speed, and value.

One misconception advisors often share with us is the belief that one-on-one negotiations are easier and brokers will just get in the way of a personal connection between buyer and seller. This perception is understandable, as it is essential that buyer and seller have a mutual affinity and have aligned interests in order to transfer and retain client relationships after the deal is done. However, mutual affinity is not sufficient to get buyer and seller over basic negotiating factors, such as valuation, deal structuring, and tax allocation of the purchase price. These are complex topics where a mediator can provide expertise and perspective to both sides and advance the deal forward.

Financial services is such a regulated industry, with the added complexity of requiring a long transition, that it is common for a sale to get bogged down in “paperwork.” So, while each party does need representation, there also needs to be a knowledgeable and neutral mediator who can be responsible for keeping everyone on track, offer solutions, and has data to show why one side’s objection is or is not valid.

FP Transitions is pleased to announce the sales of financial services businesses in the following areas during the month of July:

• Seattle, WA  |  $780,000
• Central Coast New Jersey  |  $630,000
• Fresno Area California  |  undisclosed
• Kansas City Area Missouri  |  $1,300,000
• Southern Illinois  |  undisclosed
• Portsmouth, RI  |  $2,450,000
• Orange County California  |  $260,000
• Philadelphia Area Pennsylvania  |  $460,000
• Central Colorado  |  $880,000
• Upstate New York  |  undisclosed
• Philadelphia Area Pennsylvania  |  $1,770,000

VIEW CURRENT LISTINGS HERE 

VIEW COMPLETE LIST OF PRACTICES SOLD 

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Sold announcements include all closed third-party transactions facilitated by FP Transitions, including private listings, pre-arranged matches, and those listed on the open market. 

FP Transitions is pleased to announce the sales of financial services businesses in the following areas during the month of June:

• Northern New Jersey | $395,000

• Colorado | undisclosed 

• Chicago, IL | $185,000

• Georgia | $380,000 (partial book sale)

• Boise, ID | $550,000

VIEW CURRENT LISTINGS HERE 

VIEW COMPLETE LIST OF PRACTICES SOLD 

LIST YOUR PRACTICE WITH FP TRANSITIONS

Sold announcements include all closed third-party transactions facilitated by FP Transitions, including private listings, pre-arranged matches, and those listed on the open market. 

Whether you are buying or selling, it is important to understand what is being bought and sold and what expectations both the buyer and seller have of each other. Absent these details, it is difficult, if not impossible, to determine if an offer is fair. After all, “fair” is a relative term. The question of fairness would be easy to answer if all deals were done the same way, but the reality is they are not. Nonetheless, there are still common attributes to most deals that can shed light and aid in understanding the underlying terms. This in turn helps both buyer and seller assess the reasonability of an offer. 

WHAT IS BEING BOUGHT AND SOLD?

The sale of many, if not most, financial service businesses are completed as asset sales as opposed to stock sales, where all ownership rights are transferred to a third party. In an asset-based sale, both buyer and seller receive more favorable tax treatment when compared to a stock sale. Since financial services businesses are primarily relationship-based, providing mostly intangible services, what is being sold in an asset sale is rights to a future benefit stream—namely, revenues. However, given the intangible nature of the assets, there is no certainty that a buyer will receive the same amount of revenue from the clients as the seller did. This is why the ability to leverage the seller’s goodwill (the primary asset being bought and sold) to establish proper deal terms that create a shared risk, shared reward scenario become important. 

FP Transitions is pleased to announce the recent sales of financial services businesses in the following areas:

FP Transitions is pleased to announce the recent sales of financial services businesses in the following areas:

FP Transitions is pleased to announce the 2019 sales of financial services businesses in the following areas:

• Richard Metro Area, VA • $520,000
• Central Illinois • $390,000
• New Haven Area, CT • $2,000,000
• Colorado • $200,000
• Eastern Pennsylvania • $610,000
• Minneapolis Metro Area • $700,000
• Northeastern Wisconsin • $190,000
• Atlanta Metro Area • $330,000
• Eastern New Jersey • $1,500,000
• Eastern New York State • $300,000
• New York, NY • Undisclosed
• San Francisco Bay Area • $1,100,000
• Pacific Northwest • $950,000

VIEW CURRENT LISTINGS HERE 

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• Central California • $1,500,000
• Southeastern Connecticut • $800,000
• Chicago, IL • $317,000
• Northwestern US • $1,000,000
• Eastern New York State • $410,000
• Northwestern Wisconsin • $340,000
• Northern Alabama • $3,000,000
• Columbia Metro Area of South Carolina • $1,360,000

VIEW CURRENT LISTINGS HERE 

VIEW COMPLETE LIST OF PRACTICES SOLD 

LIST YOUR PRACTICE WITH FP TRANSITIONS

FP Transitions is pleased to announce the recent sales of financial services practices in the following locations:

• Santa Cruz, CA • $221,000
• Southern New Jersey • $668,000
• Maryland • $652,000
• Southern Oregon • $261,000
• San Francisco Bay Area • $583,850
• Northern California • $1,800,000

VIEW CURRENT LISTINGS HERE 

VIEW COMPLETE LIST OF PRACTICES SOLD 

LIST YOUR PRACTICE WITH FP TRANSITIONS