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The global financial crisis is spurring record demand by advice firm principals for help in putting succession plans in place, according to the head of IPAC Business Partnering, John Saint.
“Many businesses that were extremely profitable before the global financial crisis have lost profitability, prompting their principals to think seriously about putting a succession plan in place.”
On the other hand, Saint said these principals “do not want to sell their firms if they don’t have to as the market is at the bottom of the prices and valuations cycle”.
“They’re increasingly taking a forward view whereby they contract with us today for a sale at some point in the future when the circumstances are right for vendors.”
The demand is manifesting itself in growing requests for Business Partnering to put together the necessary structure for them to be able to sell in the future at pre-determined prices, he said.
“We’ve had as busy a year as we’ve ever had helping people implement this kind of succession solution for their business, themselves and their clients.”
Launched in 2002, IPAC Business Partnering has ownership or partial ownership in a network of 20 advice firms with about 100 advisers in total, Saint said.
He added that IPAC is also experiencing growing demand among advice principals to sell their businesses outright to IPAC.
“There are also many advice businesses that are now in financial difficulty, particularly those that have borrowed to grow over recent years,” he said, adding that for them succession planning it is not an option.
