Forbes has revealed an extensive evaluation of the actions and thought processes of 803 financial advisors, and the feedback is very telling. As a lot of people are already aware in the financial sector, the survey has confirmed the fact that there is a greater demand for financial practises than supply. Of those interviewed, more than 50 per cent of financial advisors stated that they were interested in purchasing a financial advisory practice. Nevertheless, only a quarter were keen to sell, meaning demand outweighs supply by roughly 25 per cent.
In regards to selling a financial practice and the three types of business models, there is a small difference concerning those that are willing to sell. The least willing are financial advisors running multi-family offices, with only 18 per cent attracted to the idea, next comes wealth managers, with 23 per cent interested, and finally, 28 per cent of investment managers are interested in the prospect of selling their business. Of those that are interested in selling, two-fifths of them are interested in or have considered private equity acquirers or consolidations.
But, what about those interested in buying financial advisory firms? Buyers range from private equity operations and consolidators, to financial institutions such as accounting firms and banks, to financial advisory practices. The evaluation revealed that approximately 85 per cent of multi-family offices were seeking to acquire a financial advisory firm. Moreover, roughly half of the investment managers and half of the wealth managers were equally interested in this proposition. In addition to this, 56 per cent of advisors have talked to advisors about joining their firm within the last three years or are currently in conversation about doing so. Check out SmartRoom’s merger acquisition due diligence checklist if you’re interested in this. Moreover, 51 per cent of investment advisors, 57 per cent of wealth managers, and 75 per cent of financial advisors that run multi-family offices are looking to or have brought in new talent.
As you can see, the statistics are extremely telling, and sellers are in the position of power, as there are more buyers in the marketplace than there are available financial advisory firms. Thus, buyers need to seek out the best opportunities for them. There are numerous ways to do this. One of the most convenient and effective ways is to use online marketplaces that gather details about the opportunities that are available. This does not relate to a website that simply lists companies for sale, rather it is an online marketing place where you will find everything from the seller’s intent, to the yearly revenue, to the percentage fee and commission. You can use platforms like this to engage with sellers and determine the best opportunity for you.
All things considered, finding financial advisory practices for sale can be difficult, as they are not as many. While marketplaces represent the perfect platform for those interested in buying, it is important to remember that competition is fierce and thus you will need to do all in your power to make your offer more appealing