Why Buy a Client Base or an Advisory Firm?

I’m currently working with several firms considering a client base or business purchase.

Each has different reasons.

One wants to achieve more significant ‘economies of scale’.

One wants to fill a gap in the range of expertise.

One is on an aggressive start-up path seeking a more ‘stable larger’ size.

The last one has always had ambitions of creating a ‘national presence’.

There are attractions to purchasing.


For raw start-ups, purchasing is a logical option.

Expecting to build a professional advisory firm one client at a time is probably expecting too much in 2023.

Growing via purchase can create higher business valuations, reduce dependency on key individuals, obtain better buying power, offer broader careers to team members, generate fee uplifts with new services, and provide cost savings thanks to removing redundant resources or systems.

‘Bigger is Better’ can also be driven by egos and equity backers eager for the perceived returns accelerated by inorganic growth.

Is the acquisition path as relevant in 2023 as it may have been in the past?


It depends.

Despite popular opinion, the financial advice industry is still in its infancy.

This means that firm revenues can often be weighted towards the skills of critical individuals rather than a consistent, specific and methodical approach from a skilled advisory team.

Unfortunately, selling founders often don’t shift well once acquired.  The years spent building their business, trusting their proven work habits, built in a past advice era, may mean their quick post-purchase exit is a better alternative than a more extended transition period to ‘settle’ the newly acquired clients.

Integrating new team members is a more significant issue when purchasing more than just a client base.

Ironically for firms that make their money planning for others, their post-purchase integration plans are rarely well-planned and executed.

A planning team’s skills in advising others seem to be their weaknesses when taking advice from others who now own the plan post-purchase. Integrations test everyone, every system, and every plan.

Most of our expertise with these projects is helping expose the unstated assumptions, clarify each party’s expectations, prioritise the known complexities and anticipate the deeper complexities.


There is a more significant challenge for every purchase decision this year.

The biggest challenge is designing, implementing and managing an integration path towards a “one firm – one approach – multiple expertise” outcome.

This is hard in any service industry.

It is particularly tough today in the financial advice market.

The tectonic plates underpinning the financial advice industry – superannuation, technology, regulations, taxation and investments – are shifting quicker than ever, challenging the long-term returns today’s purchases will be built upon.

Purchasing to grow based upon increasing the amount of product-related services is becoming more complex and with less margin than purchasing to grow from building more trusted client relationships. The first is dependent on product performance, the second is dependent upon relationship performance.

Acquisitions and mergers made today will be judged less by how advice products are better distributed and more by how advice relationships are better grown.

The financial advice industry is uniquely placed.

It is supply-constrained, not demand-constrained.

In this marketplace, the strongest reasons to consider a purchase for comprehensive advisory firms are less about seeking more revenue, more platforms, or more products and more about seeking the next breed of advisory team members whose career success will be judged on the quality of advice relationships developed.

These have got to be the best times to grow comprehensive advisory firms.

Appropriately done with solid leadership, acquisitions, mergers, and takeovers will accelerate growth for those teams seeking it.

What do you reckon?




Photo credit: Shutterstock_221621602



For over 30 years, Jim has influenced, coached, and consulted advisory firms across Australia. His consulting firm, Certainty Advice Group, coaches, trains and builds advisory firms delivering comprehensive, unconflicted advice with fees priced purely on value. He is growing a solid and collaborative community of advisory firms aligned on Australia’s only Certification Mark advice standard for comprehensive, unconflicted advice – Certainty Advice.  He has authored four books regarding financial advice, with his latest – What Price Value – released last year.

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