The second name on the relationship
Making sure somebody else at the firm has met each client takes about two years and raises what the firm is worth.
Making sure somebody else at the firm has met each client takes about two years and raises what the firm is worth.
Buyers ask how many of your clients have met anybody else at the firm.
The answer has a large effect on the valuation.
A buyer pays today for income that arrives over years, and all of it depends on clients choosing to stay. If clients stay because of a personal relationship with the adviser who is leaving, a significant part of what is being bought leaves with that adviser.
The buyer reflects this in a lower price, or by deferring more of the money and making it depend on retention, which passes the risk back to you.
The second name does not need to be an adviser. It can be a paraplanner or a client-relationship person who knows the client’s situation, has met the client and sits in review meetings as a matter of routine.
This has three effects. The client deals with the firm as a whole. A meeting can happen when you are not there. When the handover comes, the client changes lead adviser and everything else stays the same.
It shows in the file only after several review cycles, and a buyer looking at your firm in eighteen months will see what is on file then.
Two years of this as routine counts for more than preparation in the final quarter. It requires somebody else to be in the room at each review.
Who sets the floor, when it is set and what happens if you disagree. Three questions to ask of any such commitment, including ours.
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Preparing for retirement takes longer than eighteen months. How long each part of the preparation takes, from the client files to agreeing terms.
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Your firm may have households below the level at which a servicing model pays for itself. Ask a buyer what will happen to them.
Read itSteven Bates, Director of Advisory at Equity & General, takes the first call with every adviser. Ring him on 020 8396 0486 or send a short note about your firm.