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What are brokerage buyers looking for?

- Recurring clients

- Deferred deal structures

- Clear customer data with more information than just contact details

- A handover period to introduce key clients & providers

- All relevant compliance in order

- A strong team can be desirable

Deferred deal structures?

Deferred deal structures?


also called buy now pay later if you hit certain sales targets

Yes, you can have conditional deal structures based on targets, these can get quite complex, so best to work with a very experienced solicitor in a deal like this.


Deferred deals /share deals etc are the ones to stay away from , unachievable targets set by the buyer aimed at the greedy broker wanting a high unrealistic price . I would only be interested in a straight buy out lump sum on the day i sign the forms 


Personally i think i cant under stand why the OP cant break down a typical deal ? or actually inform us of a completed deal which no names mentioned, how was the money paid etc 

Selling 100% of a business for all the money upfront is clearly the ideal situation, however, the total consideration will be substantially less than a deal structure with elements of deferred payments.

In reality, it doesn't benefit a broker to attempt to charge a "high unrealistic price" as the business is likely to never be sold. However, in some cases, brokers can charge on a monthly retainer basis and attempt to hold the client for as long as possible, which is very unethical.

We operate on a milestone payment structure so that we are only making money if the deal is progressing. 

In terms of actual deal examples. Most commonly, our buyers like to purchase brokerages with an upfront payment, usually no more than 60% on day 1 and then the remaining 30% to be deferred over 1-3 years.

A popular method our buyers are using to attempt to acquire is a straightforward % share of future business, however, a seller will rarely agree to these terms.

I can't stress enough how although mortgage brokerages are relatively straightforward, many variables affect a deal structure. Both buyers and sellers have their desired outcome and they will both compromise in creative ways to mutually suit.

Maybe I should make another thread with deal examples.



The honest answer is there is a standard range which buyers will pay - but no specifc deal details - without going through the small print of the firm your acquiring.


i.e. Most Firms will quote 3 to 6 times (for Investment/Pension Firms) - which is a huge range.

The easy statement to therefore make, is speak to these firms and allow them to do some due diligence and see what specific numbers they then come up with.


(As noted in many posts - I used to work for one of the larger acquisition firms and i worked closely with the Acquisition team - I did the due diligence on the firm - they ran the numbers).


I wouldn't rate my chances of getting past your Due Dillgence BFP.

I am an IFA,  with significant FUM, with trail well into the 6 figures and I am approaching the age where i am considering my options , the multiples Box Fin Plan mention (3 and 6 times) are constantly mentioned although i think 3 x is the most you'd expect

FYI , I bought out a local IFA a couple of years ago and the deal was straightforward , likewise the payment method, with all monies paid within 12 months  I accompanied the retiring IFA on each appointment over the year, at each appointment LOA's were signed if the clients were happy to move across , they had been pre warned their adviser was retiring and given options. Overall it was a smooth process, with approximately 10% of clients electing to find another IFA of their choice . The IFA had given us a date in the future he was retiring and he kept to it . 



To be fair - I only ever 'red flagged' an acquistion once...

1) Firm was in Liquidation

2) ONE Director wanted to buy the firm out of Liquidation and sell it to us

3) There was some major complaints/liabilities ongoing IIRC


Alot of it could have been resolved - but the unresolvable worry was the other Directors would have their clients follow them in different directions. The One Director we was meeting with didn't see it as an issue :)


... and the powers that be queried WHY we had still travelled to Shrewsbury if we knew what the issues was (i.e. it was very much a wasted trip for the 4 of us ), not the outcome - i.e. they accepted my report that it was a very bad apple and we wanted nothing to do with it and the deal wasn't done.

I would agree with BFP's easy statement, best route to find out the reality. 


And advisable to speak with multiple buyers as there can be a large range, and it's not always about the final figure.

Who is buying and who is selling ?

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