There are a number of elements to consider in successfully setting up and positioning your financial planning business for sale.
- Firstly and perhaps most important, you have to be a good quality business that is uniquely positioned if you’re going to be attractive to a buyer;
- Second, you need mechanisms in place to attract new clients to the table and retain them;
- Third, you need systems and processes in place to run an efficient business;
- Fourth, you have to be able to attract quality staff to help build and sustain your business; and
- Fifth, you don’t present any risk to a potential buyer. In other words, you know what you’re doing and you provide quality advice.
In Count’s case, the reason Commonwealth Bank bought us is because they knew we were a quality business and also had a unique positioning. If you look like everyone else then you have to do something special to stand out.
When I started out, for example, I was a banker, and I knew I could never compete against the sales skills of life agents and others. I believed accountants should be involved in this business, so that’s where I focused my attention and I developed that side of the business. In doing this, we carved out a niche where there was less competition.
Count is a quality business. We’ve built a reputation in the market for delivering quality advice with good quality people. The bank can buy many financial planners, but they obviously wanted a business that was accounting-based. There are not too many businesses like Count. As a professional advice-based business, we also faced less risk as a result of regulatory uncertainty around FoFA.
We weren’t intending to sell to anyone when Commonwealth Bank came along. I’ve had plenty of people ask me if I would like to sell the business, but no-one had made an offer post listing.
The directors considered the Commonwealth Bank offer, bearing in mind economic and regulatory uncertainty, competition, changes in management in recent years as well as other factors and decided it was worth recommending to the shareholders – who voted more than 99 percent in favour of the acquisition. This speaks for itself.
Lastly, I would say you need patience. I’ve seen people come and go in this business over the years, because ‘it was all too hard’. You need patience and perseverance in this game. It takes time to gain a reputation and build and develop a quality business.
