Thinking of selling your advice business? Maybe read this first.
Research carried out by Albermarle Street Partners as part of the Coalition of the Independent Initiative (a recent FT Adviser article gives a good background to the initiative – you can read it here) provides some interesting insights for any adviser thinking of handing their clients over to a consolidator vehicle.
Conclusions from 49 advisers surveyed showed:
One adviser was quoted as saying: “We would worry that clients are not being looked after properly by a firm trying to make square pegs fit into round holes.”
Another said, “Those larger companies aren’t cheap. And they don’t appear to provide better service.”
Alternatives
The driving force behind the Coalition of the Independent is to find an alternative to the consolidators.
The group has articulated five specific aims:
Clearly, not all consolidators are equal (I know of some that come recommended by advisers, post-sale) but I would recommend doing full due diligence on their claims, particularly when they are trying to persuade you to sell to them.
Some advisers may not give too much thought to what happens to clients once they have moved on but this isn’t the case for most of the advisers I’ve met. They have spent a career providing the best possible service they can and have built strong and close relationships with not their clients who often end up becoming friends.
Resisting the siren song of the consolidator can’t be easy, particularly when they are so persistent (84% of advisers involved in the Coalition have been approached – often multiple times). There is no easy answer but it’s heartening to see that some advisers are banding together to fight for what they believe in – independence and integrity.