“Buyers need to ensure they are well-established, have access, and can tell a compelling story about themselves and their practice,” he says. “An advisor’s career wealth is greatly influenced by dealer strength. In fact, the most important career decision next to becoming an advisor, is dealer choice.”
For would-be buyer advisors who may be currently considering – or re-considering – their choice of dealer firm, Ciliberto suggests a few “mirror check” questions, including:
- Does my dealer minimize my administration and compliance responsibilities?
- Does my dealer give me access to non-commoditized products?
- Does my dealer give access to advanced technology and unique resources?
- Does my dealer have the systems in place to support my acquisition?
- Would a retiring advisor leave their dealer and be proud to come join me at mine during the transition process?
As for advisors looking to sell, Ciliberto preaches the value of preparation. Whatever their practice’s unique composition, he says a seller will be able to fetch a higher value at more favourable terms if they are well-prepared.
“Sellers need to envision their successor’s ideal profile as well as their own retirement,” he says. “They then need to inform their clients early of an upcoming transition. This entails showcasing the advantages of the succeeding advisor, outlining the transition process and addressing any concerns.
“It’s also important for sellers to ensure their book itself is prepared for a transition,” he adds. “This means cleaning up; exiting captive products, triggering capital losses early, moving paper to digital, preparing data for due diligence, among other things. … Clean books attract higher price multiples and better deal terms.”
