Those who are looking to purchase financial planning practices are starting to pay closer attention to client engagement strategies before they sign on the dotted line.
Speaking to ifa, Nicholas O’Donohue & Co senior associate Adrian Lynch said purchasers are now looking beyond the “raw numbers” such as funds under management and revenue.
The greater reporting obligations contained in the Future of Financial Advice reforms have already had a positive effect on client engagement, he added.
“If you’ve got a disengaged client base, that’s clearly going to have a negative impact on your saleability and price,” Mr Lynch said, but added that it is frequently difficult to quantify ‘engagement'.
“If you’ve got a number of potential practices that you’re considering, you will be more attracted to the one which has a similar cultural alignment,” he said.
The purchaser’s decision is made much easier if it can be demonstrated the client base is aware of the value the planner provides, said Mr Lynch.
The worst case scenario would involve a “mass list of names” with contact details that may or may not be up to date, and no way of determining which fees have been charged or disclosed.
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