However, the shift to adviser charging models does not mean that your firm suddenly becomes unattractive or your projected cash flow will dry up. Keeping carefully audited books and pinpointing everything from retainer to one-off fees will be a huge plus when it comes to showing proof of revenue.
A potential buyer will know the inherent value of a client book, assets under management/assets under administration, introducer fees and client retention rates, and these will be taken into consideration when a valuation is done.
Winning strategy
To summarise, there are challenges, obviously, and there will be more firms, sadly, that cannot survive in this post-RDR world.
We have already been told of a 13 per cent drop in adviser numbers, but whether this ends up on a trajectory that takes us nearer the 30 per cent loss of advisers predicted in 2010 by Ernst & Young is another question.
For those who are determined, they can succeed. They can build a successful business, they can groom themselves for growth or for a sale and they can win, whatever path they choose.
And, perhaps ironically, the very things that the RDR forced upon the industry – clean charging, streamlined businesses, higher qualifications – are proving to be good measures of a healthy business which, in turn, will be more attractive to potential buyers.
Steve Hagues is founder of Retiring IFA
