Tips For Successful Advisory Practice Acquisitions

Advisors who are relatively new to the industry and want to grow their business quickly may seek to acquire another practice. Larger firms or practices looking to grow in size and bring in more revenue may also be looking for a new addition to their practice. 

If you’re considering an acquisition, take the time to intimately familiarize yourself with the business, and always make sure to remain objective when determining whether it will be a good fit for your current business and worth its purchase price.

Conduct due diligence.

With the help of an accountant, thoroughly examine the business’s financials. Watch for signs of any potential issues. Evaluate income and expenses, their sustainability, and any anticipated changes to those numbers. 

Confirm that both your finances and that of the business you’re looking to purchase are sound. Should you require credit to finance the acquisition, ensure that cash flow will be sufficient to cover the payments. 

AdvisorLaw offers ultra-customized lending solutions, including flexible terms and low-equity contributions. Learn more about our robust financial advisor loans and lending platform, or click here for a complimentary consultation.

How many clients will you retain?

Research has shown that about one-third of advisors who have purchased another practice retain less than half of the acquired business’s client base. Calculate how much of the client base can move away from the firm before it approaches insolvency and what you can do to compensate for such a loss of revenue or how it could be offset.

Mergers and acquisitions are known to make both staff and clients uneasy — don’t underestimate the importance of transparency and communication throughout the process. 


If you’re interested in our lending or acquisition services, please give us
a call at (303) 952-4025 or click here for a complimentary consultation.


Learn everything you can about the business.

Get to know the seller, and familiarize yourself with the way they conduct business. Meet with the clients with the seller present. Learn their expectations, and assure them that their accounts will be handled with the same or higher level of care, attention, and expertise. 

Your best chance to retain clients is to keep them informed and secure.

Staff often fear that they will lose their positions in an acquisition. Involving the staff and keeping them up to speed can assuage their anxiety. Clearly articulate what will be expected of them, how their duties may change, and any changes to structure or organization that might affect them. 

Is the merger a good match?

Make sure that the existing culture of the business will mesh with your own way of operating. If the businesses are not a match, move on, and focus your search elsewhere.

Successful acquisitions can be achieved when you take your time, conduct thorough research, evaluate the facts objectively, and keep both staff and clients comfortable and confident in the new direction of your business. 

AdvisorLaw can provide expert consultation

Our in-house loan facilitation allows us to seamlessly offer applicable contract work that a typical lender cannot provide, including strategies to protect against “rogue sellers” in the industry. 

AdvisorLaw can provide consultation regarding buy-sell agreements, partner sourcing, cross-purchase agreements, non-compete defense, legal consulting, financial advisor succession agreements, and RIA formation.

Please fill out the form below for a complimentary consultation: