Prep your firm for sale, even if you don't plan to sell

Prep your firm for sale, even if you don't plan to sell
Fixing up the business will make your work more enjoyable and your firm more profitable
DEC 15, 2020

Take this season as an opportunity to prep your business for sale, even if you have no interest in selling.

Why? Because if you do, your work will be more enjoyable and your firm more profitable.

Have you ever talked with someone who fixed up their home to sell it? After they've removed the clutter, applied fresh paint and refreshed the landscaping, they often remark how much more they’ve come to like the place.   

Here are some things you can do to remove the clutter in your firm, so it runs better, is more profitable, and so you enjoy it more.

Get rid of unappreciative or abusive clients. Odds are you have one or two clients who drive you bonkers. They are ungrateful, an annoyance, and whenever you see an email with their name on it, your stomach seizes up.

Politely ask these clients to leave.

There was a client I had been serving since 1997, but who was so much more demanding than any other client, took our work for granted, and was simply a jerk. After I made the phone call stating that I wouldn’t be serving as his adviser any longer, a huge weight I didn’t even realize I’d been carrying was lifted, my love of the job returned and my motivation to build my firm ratcheted up several notches.

Shed or sell your unproductive clients. Just about every adviser who has been in the business for any length of time has a handful of clients who don’t really fit their model. Maybe it’s that one 401(k) account that you manage. Or maybe it’s the muni bond ladder that you manage for a client, and every time a bond matures or gets called it takes you out of your normal rhythm. 

The more you focus on your core clients, the more time you’ll have to bring on additional core clients, and the more profitable your business will be. Find another adviser to serve those clients who don’t fit within your core strengths. The small percentage of revenue that you’ll lose will be replenished with clients who are better fits for your wheelhouse.

Get an independent audit. An independent financial audit will pay for itself by illuminating your strengths and weaknesses, showing you where you need improvement, where you are profitable and where you aren’t. And if you ever went to sell your practice or merge with someone else, having a few years of audited financial statements will come in handy.  

Freshen up your physical space. I’m assuming that by now you’ve got a decent looking backdrop for your video meetings, but what about when you return to the office? When someone walks in for the first time, do they get a vibe that you care about your surroundings, or does your office feel like a check-cashing store in a strip mall? 

If you haven’t replaced your office furniture in the last decade, now is the time. The only thing that clients and potential clients hate more than an office that’s excessively opulent is one that is threadbare or tacky.

Always run your business in a way that makes it attractive to buyers. If you go through this exercise and then find a partner to merge with, you’ll be in great shape. And if you maintain your independence, you’ll find it more profitable and rewarding.

Scott Hanson is co-founder of Allworth Financial, formerly Hanson McClain Advisors, a fee-based RIA with $8 billion in AUM.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.