If you’re looking to buy a financial advice, wealth management or insurance business, I can help with the legal side. Most of the buyers I act for are already in the sector, such as an IFA firm taking on a retiring adviser’s clients or a wealth manager adding a business that fits alongside its own. I’ve bought and sold various IFA businesses, an employee benefits business and a regulated insurance business for a wealth management company, as well as a good number of client bank acquisitions.
These deals go through the same stages as any other business purchase, but the FCA has a say in whether and when the deal can happen, and what you’re paying for is mostly a set of client relationships, which can’t be forced to move across to you.
I should say that I don’t advise on FCA permissions. Whether your firm’s permissions cover the business you’re taking on, and how to apply for a variation or for approval of a change in control, is something for a compliance consultant (most buyers in this sector already have one). What I do is the deal itself, which means the heads of terms, the legal due diligence, the purchase agreement and the contracts that go with it, including appointed representative agreements. If you’re selling, there’s a separate page on selling a financial services business.
Buying a client bank
Most of the purchases I see in this sector are client bank deals. In those you aren’t buying the seller’s company; you’re buying the goodwill, the client records and the right to the ongoing income, and the clients move to your firm. Legally that’s an asset purchase, so the main document is an asset purchase agreement and the seller’s company stays where it is, along with its history.
The clients don’t move just because the agreement says they will. Each one has to agree to become your client and sign up to your terms, and the agencies with providers and platforms have to be moved across as well. Loyalty is usually high with IFA businesses, particularly where the seller introduces you properly, but some clients won’t come and the price needs to allow for that. I’ve written about how a client bank sale works in practice, and about a SIPP client bank deal I acted on.
Buying the company and FCA approval
The other way of doing it is to buy the shares in the authorised firm under a share purchase agreement. You get the company with its permissions, agencies and staff already in place, but you also take on its history, including all of the advice it has given in the past.
Anyone who decides to acquire control of an FCA-authorised firm has to notify the FCA and get its approval before completing, and completing without approval is a criminal offence. This comes from Part 12 of the Financial Services and Markets Act 2000. As the law stood in October 2026, the FCA has 60 working days to assess the notice from the day it acknowledges a complete one, and it can pause that period once (generally for up to 20 working days) while it waits for further information. If the FCA decides the notice is incomplete then the 60 days haven’t started, which is one of the reasons these deals tend to take longer than the statutory period suggests. The FCA’s change in control pages set out the process and the forms, and your compliance consultant will normally prepare the notice.
In the agreement, FCA approval is made a condition, so you exchange contracts, the notice goes in and completion takes place once approval arrives. The agreement therefore has to deal with who does what in the meantime, how the seller runs the business while everyone is waiting, and what happens if approval is refused or hasn’t arrived by an agreed long-stop date.
How the price is usually paid
On a client bank purchase the price is usually a multiple of recurring income and it’s rarely all paid on day one. More often there’s an initial payment followed by one or two further payments, which are adjusted depending on the clients (or the income) that actually transfer and stay with you. You can do this as a retention, where you hold some of the money back until you can see what has come across, or as a clawback, where you pay it and can recover some of it if clients leave.
Whichever you use, the agreement needs to be clear about what counts as a transferred client, when the income is measured, what happens to a client who moves across and then leaves six months later, and who decides if the two of you can’t agree. The same approach can be used on a share purchase. I’ve written more generally about deferred payments in business purchases.
Liability for past advice
The main risk with a financial services business is the advice that was given before you arrived. If you buy the shares, any complaint about that advice is a complaint against the company you now own, and complaints can come in years later. For that reason the legal due diligence looks closely at the complaints history, the firm’s dealings with the Financial Ombudsman Service and the FCA, its professional indemnity cover and claims record, and the types of advice that have caused problems across the industry. The agreement should then include warranties covering all of that and specific indemnities for anything that has been found, usually with a retention so that there is money to claim against.
If you’re buying a client bank, liability for the seller’s past advice should stay with the seller and the agreement should say so clearly. It should also deal with the seller’s run-off insurance, as an indemnity from a company which has no money and no insurance cover is of little use to you. You’ll also want restrictive covenants to stop the seller from carrying on advising the same clients from somewhere else, and it’s worth thinking about the advisers and administrators that the clients actually know and deal with.
Appointed representatives and networks
If either you or the seller is an appointed representative of a network, the principal firm will need to be involved. Its agreement will usually say who the clients belong to and whether they can be moved, and its consent may be needed for the deal. I review those terms as part of the due diligence. Where the seller or individual advisers are joining you as an appointed representative, I can draft the appointed representative agreement, although whether the arrangement meets the FCA’s rules is again a question for your compliance consultant.
How long it takes and what it costs
A client bank purchase which doesn’t need regulatory approval can usually be done in two to three months, which is about the same as any other business purchase. A deal that needs FCA approval usually takes around six months, and occasionally up to twelve.
I work on fixed fees, with a written scope of work agreed before I start. The fee depends on the size of the deal and how much work is involved. On a sale or purchase between £500,000 and £5m it’s usually between about 1% and 3% of the price, and the percentage falls as the deal gets bigger. Most full sales and purchases start at around £10,000 plus VAT, and buying a client bank usually costs a little less than buying a whole firm, as there’s less to negotiate.
Next steps
If you’d like me to act, get in touch and let me know what you’re buying, whether it’s the shares or the client bank, whether each side is directly authorised or an appointed representative, the price and how it’s going to be paid. I’ll come back to you with a fixed fee and a scope of work.
