A LENDING DIVISION OF FIRST STATE BANK NEBRASKA

How to Find a Book of Business to Buy

21 Nov
financial advisor acquisitions

How to Find a Book of Business to Buy

As a growth minded entrepreneur, you are always on the hunt for ways to build your financial services business. One of the fastest ways to expand is by purchasing an existing book of business. However, you may not know where to look for potential sellers, especially If it’s your first time purchasing a book of business. In this post we will outline a few common sources to help you determine how to find a book of business to buy and grow your practice quickly.

Matchmaking Services (Brokers)

In every industry, there are business brokers, commonly referred to as matchmakers, who specialize in connecting buyers and sellers. Matchmakers are paid a percentage of the purchase price of the business for their services and can represent either a buyer or a seller. Many matchmakers focus on one or a few key industries, so it’s best to find one that specializes in financial advising businesses. This way they will understand the legal considerations as well as the nuances that are specific to your industry.

Professional Networking

Many financial advising firms are members of professional organizations such as the Financial Planners Association (FPA). Professional organizations are always excellent ways to connect to key people and information in your industry, including potential sellers. Often these groups are close knit and people quickly learn who is in the market. Focus on key influencers, volunteers, and leaders who are active in the organization and let them know that you are interested in locating a book of business to purchase.

Investment Products Wholesalers

Although not an obvious choice, wholesalers keep a watchful eye on the industry and their clients. They stay heavily connected and are willing to share information with current and potential customers. Focus on investment products you currently use or would like to add to your portfolio to ensure you get matched with a book of business that matches your investment approach and mix. We will discuss more about what to look for in a prospective book of business in our next blog post.

Managers in Your Umbrella Organization

When looking for a book of business, it’s always easiest to keep it in the family. Other businesses within your umbrella organization will possess the same systems and processes, which makes the acquisition and transition process so much easier. Also, your internal network is your strongest and the managers in your organization are often the first to know who is buying and who is selling and often share that information with each other and their interested team members.

Bottom line, if you are looking for a book of business to buy, let people know. It’s a connected world, especially in the financial advising community. Reach out to your network both internally and across the industry and align yourself with your colleagues and service providers who are most involved in the organization and the industry. It’s likely you will find yourself presented with multiple books of business. Then the issue becomes not how to find a book of business to buy, but which one. We will cover that in our next post.

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