| Key points |
The rates of attrition as clients retire and die makes it even more important that a considered new business or client acquisition strategy is in place. Strong networks have extremely stringent compliance and control functions. Article continues after advert In the current climate of consolidation and acquisition, networks may well consider buying a business rather than relying on organic growth. |
In the current climate of consolidation and acquisition, networks may well consider buying a business rather than relying on organic growth. Due diligence is the key, particularly when taking on a client bank of a retiring IFA, or when inviting a new firm to join your network.
There may be the odd blip in an adviser’s track record, as there could be Fos and other complaints lurking in the background, which due diligence will show up, but there will be explanations which must be heard and considered decision reached.
A well-managed, well thought out and well integrated acquisition strategy is the short cut to acquiring rather than attracting new clients. But the industry has seen many disastrous and ill-fated integrations, which have left advisers disillusioned and wanting to jump ship and, much worse, clients receiving a pretty shoddy service.
In conclusion, any network, usually to satisfy investor greed or shareholder impatience can trumpet an aggressive expansion plan stating that X number of advisers and £Ym funds under management will be achieved by the year dot, but in reality unless you can retain existing clients for the long term and attract new ones for all the right reasons, then there is no point in trawling the depths for numbers. In the end, common sense has to prevail.
Andrew Bennett is chief executive of Beaufort Financial Planning
