Solicitor in Leicester for

Buying an IFA client bank or financial services business

I’ve worked with Steven for a number of yeears. Unusually for a lawyer, he is very commercially minded, and can get to the nub of issues straight away. Would thoroughly recommend him.


Prof Rishabh Prasad

Willows Health


0116 3667 900

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Financial Services Firm

Solicitor specialising in Buying a Financial Services Business

If your dream has always been to buy a financial services business, and now you’re presented with the ideal opportunity – congratulations. But also, proceed with caution.

Undoubtedly, you’ll want to know the easiest way to go about buying a financial services business. That’s where I come in.

As an expert business solicitor in Leicester, I have extensive experience guiding business owners through the process of buying businesses across multiple industries – including plenty of financial services organisations. Here’s what I’ve done recently:

  • Buying a regulated insurance business for a wealth management company (link)
  • Buying an employee benefits business
  • Sale of a debt collection agency
  • Buying and selling various IFA businesses
  • Client bank acquisitions

There are some standard considerations to buying any type of business, and others are specific to buying a financial services company.

Read on to learn how to accurately evaluate a financial services business to assess its true value.

1.   Perform Due Diligence

To ensure that you know exactly what you’re buying, it’s vital that you perform comprehensive Due Diligence. This process helps you to fully understand the company’s operations, financial condition, risks, and legal liabilities.

A thorough review and authentication of all information relevant to the financial services business is crucial.

This should include (but not be limited to):

  • Financial Analysis: Review the company’s financial statements, budgets, projections, and any other relevant financial data to assess the company’s financial health. Dig into the financial services company’s profitability, including profit margins and return on equity, to assess its ability to generate profits.
  • Revenue Streams: Understand the sources of the company’s revenue, including fees, commissions, interest income, and other sources – with IFA’s we’re always looking at pipeline commissions, clawbacks and network payments etc.
  • Operational Analysis: Analyse the company’s operations, systems, processes, and organisational structure to understand how the business operates and identify any operational risks.
  • Legal and Regulatory Compliance: Assess the company’s compliance with FCA rules, applicable laws and regulations to identify any potential legal or regulatory issues that may impact the company’s business. Ensure you look at the company’s insurance policies (including liability and errors and omissions insurance), to assess potential risks and liabilities.
  • Reputation and Brand: Determine the company’s reputation in the industry and among its customers, as well as its brand value and marketing strategies.
  • Human Resources: Review the company’s human resources policies and procedures – including employee contracts, compensation, benefits, and any potential liabilities.
  • Technology and Information Systems: Analyse the company’s technology infrastructure, software, and data security to identify any potential risks or opportunities for improvement.

You’ll also need to look at:

  • VAT, PAYE and Corporation Tax returns.
  • Aged debtors and creditors listings.
  • Lists of suppliers to understand the supply chain and assess potential risks – such as reliance on a single supplier, or vulnerability to supply chain disruptions.
  • Latest budgets and forecasts.
  • A list of all debts owed by the business including to banks, directors, shareholders and any other third-party funders, to include amounts owed and the borrowing terms.

2. Assess the Customers

It’s important to assess the financial services business customer base – including the level of customer loyalty to identify any potential risks or opportunities. This task helps you to identify revenue stream diversity, which often correlates to how much risk a business carries. Usually with IFA and other financial services businesses, loyalty is high – you’ll look at the assets under management and generally speaking the clients will move across to you (if an asset purchase client bank purchase) – although technically we will need to novate them to your new business and they’ll need to agree the move.

What this means is when doing a client bank purchase, you may wish to consider clawback or retention sums. Often there is a ratchet of sums paid compared to the number or value of clients who actually transfer.

The profitability of the financial services business in the future hinges on factors such as the customer base, customer retention, and customer loyalty. When considering acquiring a financial services business, it’s crucial to seek diversification in both the range of services offered and the number of customers.

3. Understand the services

Most of my clients buying IFA businesses are familiar with them, but if you’re not it is important that you understand what services are being offered and whether your FCA authorisation or AR permits you to act and advise – we can help with that.

If the unique product or service is readily reproducible and the company doesn’t hold any proprietary intellectual property, the ownership transition presents an opportunity for competitors to capture market share.

To understand the services offered by a financial services business, you should consider the following steps:

Research the Market: Conduct market research to understand the industry landscape, key players, and emerging trends. This will help you gain a broader understanding of the types of financial services offered and their potential demand.

Review the Company’s Website: Review the company’s website to understand its products and services. Look for information on the company’s areas of expertise, the types of clients it serves, and any unique or specialised services it offers.

Talk to the Company’s Representatives: Schedule a meeting with the company’s representatives to discuss their services in detail. Ask questions about their areas of specialisation, the types of clients they serve, and any unique or value-added services they provide.

Review Contracts and Agreements: Review any contracts or agreements the company has with its clients to understand the terms and obligations of these relationships. This will help you gain a deeper understanding of the services provided and the value proposition of the business.

4. Know the sector

Get familiar with the sector of the financial services business that you plan to buy.

To do this, read industry reports, news, and publications to keep up to date with the latest developments in the sector. This will help you gain a deeper understanding of the sector’s dynamics, growth prospects, and emerging trends. Additionally, you can plan to attend industry conferences, events, and trade shows to network with other professionals in the sector.

Compare the revenues of the business and its direct competitors in the financial services field. A wise buyer also evaluates indirect competitors who might replace the business’s main service offering.

When deciding to purchase a financial services business, it’s crucial to ensure that you have thoroughly evaluated all aspects of the business.

This includes taking into account factors such as:

●      The scale of market opportunity locally, nationally and internationally.

●      How the business is structured; its products, production and sales processes.

●      How technology and buyer trends may affect the industry.

●      How this business fits with your own. Does it, for example, open up new markets or extend your current offering?


Key questions to ask the owner of the financial services business

Company history

  • How and why did the company start?
  • What were the major milestones?
  • How much has it grown from inception until now?
  • Who are the shareholders?
  • Are they all on board with the sale Financial

●      What accounting software does the company use?

●      When was the software last updated?

●      What are your payment terms with customers?

●      What are the primary costs associated with running the business, such as rent, staffing, and equipment?

●      What is the customer retention rate?

●      What are the primary factors that contribute to customer satisfaction?

Market potential

●      What are the key risks to this business?

●      What markets exist for your services that you’re not going after?

●      What are the best opportunities for growth?

●      When was the last time you increased prices?


●      Who are the primary competitors in the market, and what services do they offer?

●      What is the market share of each competitor?

●      What are the strengths and weaknesses of each competitor?

●      How do they differentiate themselves in the market?

●      What is the competitive pricing landscape?

●      How does the business you are considering purchasing compare?

●      Are there any emerging competitors in the market that might impact future business?

●      What is the level of competition in the local area where the business operates?

●      Are there any regulatory barriers to entry that might deter new competitors from entering the market?

●      What is the customer perception of the business compared to its competitors?



●      What are the primary sources of revenue for the business, and how have they changed over time?

●      What is the customer acquisition cost?

●      What is the average lifetime value of a customer?

●      What is the sales growth rate, and how has it trended over time?

●      What is the sales pipeline, and what is the conversion rate of leads into customers?

●      What is the average deal size, and how has it changed over time?

●      What is the marketing strategy of the business, and how effective has it been in driving sales?


●      What is the current marketing strategy of the business?

●      What channels are used to reach target customers, and how effective are they?

●      What is the customer segmentation strategy?

●      What is the customer acquisition cost for each marketing channel?

●      What is the level of brand awareness in the market?

●      What is the value proposition of the business, and how is it communicated to customers?

●      How is the effectiveness of marketing campaigns measured and evaluated?

●      What is the budget for marketing, and how has it changed over time?


●      What are the key processes and systems used by the business?

●      What is the current capacity of the business, and how has it been utilised?

●      What is the level of automation in the business, and how does it impact efficiency?

●      What are the primary operational costs, and how do they compare to industry benchmarks?

●      What is the level of operational expertise within the organisation?

●      What is the quality control process in place, and how is it measured?

●      How are client complaints and feedback handled, and what is the resolution rate?

●      What is the level of compliance and regulatory oversight in the business?

●      Are there any operational risks or potential weaknesses that need to be addressed?


●      What is the current staffing level, and how experienced are the key personnel?

●      Do you use a professional payroll service? Who interacts with the payroll company?

●      Are there any employees ready to retire in the next few years?

●      Describe any training programs in the last three years

●      Describe all employee benefits

●      Do you have a bonus or profit sharing programs?


●      Why do you want to sell the company?

●      How long will you remain for training and transition?

●      Would you consider a consulting arrangement on an as needed basis after transition?

●      What is the level of existing customer relationships, and what is the potential for future growth?

●      What is the culture and work environment of the business, and how does it align with your own values?

Types of financial services businesses to buy

The most common types of financial services businesses that may be more resilient to economic downturns include:

Insurance: People and businesses will still require insurance coverage regardless of economic conditions, and insurance companies can adjust their premiums and underwriting practices to manage risks.

Debt collection: When the economy is struggling, debt collection agencies can thrive as more individuals and businesses struggle to repay debts.

Accounting and tax services: Even in tough economic times, businesses still require accounting and tax services to manage their finances and remain compliant with regulations.

Financial planning and wealth management: While clients may reduce their investments during an economic downturn, financial planning and wealth management firms can still provide advice and services to help clients navigate uncertain financial times.

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Buying a Financial Services Business: FAQs

What types of financial services businesses are available to buy?

There is a wide range of financial services businesses available for purchase, including insurance agencies, financial planning firms, wealth management companies, investment banks, accounting firms, and more.

What should I look for in a financial services business?

When considering buying a financial services business, it’s important to look for factors such as a strong customer base, diverse revenue streams, a talented and experienced team, and a solid reputation in the industry. You should also evaluate the potential for growth and profitability in the future.

How long will it take to buy a financial services business?


The timeline for buying a financial services business can vary depending on a variety of factors, including the size and complexity of the business, the availability of financing, and the time required to complete due diligence. Generally, the process can take anywhere from a few months to a year or more to complete.


The due diligence phase alone can take several weeks or even months, depending on the extent of the review required.


Financing can also take some time, as lenders may require extensive documentation and underwriting processes. Once the due diligence and financing processes are complete, the actual transaction can be completed relatively quickly, usually within a few weeks.


Overall, it’s important to be prepared for a potentially lengthy process when buying a financial services business and to work closely with experienced professionals such as business lawyers, accountants, and business brokers to help navigate the various stages of the transaction.


●      What are the legal considerations when buying a financial services business?


There are several legal considerations to keep in mind, including compliance with regulatory requirements, the transfer of licences and permits, and potential liability for past actions of the business.


It’s important to work with an experienced business lawyer who can help navigate these legal issues and ensure a smooth acquisition process.



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We provide legal services to businesses across Leicestershire, Northamptonshire, the Midlands, London and throughout the UK. 

Registered Office: Kesters Nook Limited, 19 Barnards Way, Kibworth, LE8 0RS (No Public/Visitors, By Appointment Only)

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Steven Mather

Consultant Solicitor

0116 3667 900

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