By Debbie Dry, Group Acquisitions & Integrations Director
Selling an IFA practice usually takes 6 to 12 months, from the first serious conversation to completion. The work runs through six stages: deciding what you want, getting the firm ready, comparing buyers, agreeing price and structure, due diligence and legal work, and FCA approval. Then comes the stage that actually decides whether it was a good deal. The handover.
I’ve spent more than 25 years on the buying side of this market, and at my previous firm I oversaw 57 acquisitions of advice businesses. Most principals sell once. The buyer opposite them has usually done it dozens of times. This guide is an attempt to even that up a little.
Start with what you want, not what the firm is worth.
The first question isn’t “what’s my multiple”. It’s what you want your life to look like in 3 years.
Some principals want a clean exit: sell, hand over well, retire. Others want to take capital off the table but keep advising for five or more years. Others mainly want relief from the parts of running a regulated firm that have stopped being enjoyable, the compliance burden, the PI renewals, the technology decisions, while keeping their client relationships.
All three are legitimate. They lead to different buyers and different deal shapes, which is why deciding this first matters. The deals that turn sour are rarely the ones where the seller got a slightly lower price. They’re the ones where the deal shape never matched what the principal actually wanted. If you haven’t yet worked through this, start with the questions to ask before you start.
Get the firm ready before anyone looks at it.
Preparation is the highest-return work in the whole process, and it starts 12 to 24 months before you want to transact.
Buyers pay for certainty. A firm that can produce clean data on its client bank, evidence of ongoing service delivered, signed fee agreements, an orderly complaints record and tidy adviser contracts will have a smoother process and a stronger negotiating position than a firm with the same revenue and a shoebox of spreadsheets. The work isn’t glamorous. It’s mostly housekeeping. But unprepared sellers concede ground in due diligence that prepared sellers never have to give up.
There’s a separate guide to what buyers look for in due diligence, with a practical 18-month runway.
Understand who the buyers are.
The UK market has several broad camps of buyer, and they behave differently. Consolidation is the backdrop to all of them. The number of advice firms has fallen by around 15% since 2021 while adviser numbers have held broadly steady at about 31,000, according to the FCA’s 2025 financial advice market survey, so advisers are concentrating into fewer, larger groups.
Private-equity-backed consolidators have driven much of the market’s activity in recent years. Integrated national groups buy firms to feed a single brand and central proposition. Some networks and smaller firms buy client banks rather than whole companies. Occasionally a management buyout or a merger with a local peer is the right answer. And there are longer-term owners, groups structured to hold firms rather than to resell them, which is the camp Loyal North sits in. The logic behind that model is set out in why hub-and-spoke works.
None of these is automatically right or wrong. They differ in funding, in integration approach, in what happens to your brand and team, and in what happens when the buyer itself changes hands. The differences matter more than the headline price, and they’re covered properly in how to choose a buyer.
How valuation will work.
Most UK advice firms are priced on one of two bases: a multiple of recurring revenue, or a multiple of adjusted profit (EBITDA). Smaller firms and client-bank purchases tend to be priced on recurring revenue; larger firms with real management structure tend to be priced on profit.
For smaller firms priced on recurring revenue, published reporting puts the realistic range at about 3 to 4x: weaker books sell in the high 2s, well-prepared firms reach 3.5x and beyond, and averages move around inside that range as market conditions shift. For larger, profitable firms the basis shifts to profit, where 6x to 8x EBITDA is commonly reported. None of that is a number your firm is owed, though. Where a given firm lands comes down to the things a buyer actually underwrites: how much of the revenue genuinely recurs, how old the client book is, how much rides on you personally, and whether the records back the numbers up. And how much of any headline multiple is actually banked depends on the deal structure.
The fuller picture, including what pushes multiples up and down, is in what is an IFA business worth. The short version: two firms with identical assets under advice can sell for very different prices, and the difference is usually earned years before the sale.
Approaches, offers and heads of terms.
You might reach buyers directly, through your professional network, or with a broker or corporate finance adviser. The early mechanics are similar either way. A non-disclosure agreement comes first, before any client or revenue data changes hands. Then a summary of the business, meetings with shortlisted buyers, and indicative offers.
An indicative offer isn’t a price. It’s a starting position, normally expressed as a headline number plus a structure: so much on completion, so much deferred, conditions attached. Compare offers on their whole shape, not their biggest number. A £4m headline with demanding earn-out conditions can be worth less than a £3.5m offer with most of it paid up front. The mechanics of deferred payments, earn-outs and clawbacks are explained in how IFA deal structures work.
When you choose a preferred buyer, you’ll sign heads of terms: a short document recording price, structure, what happens to staff and clients, the expected timetable, and usually a period of exclusivity. Heads of terms are mostly not legally binding, but they set the gravity of everything that follows, so take advice before signing rather than after. Be careful with exclusivity. A reasonable period is fair. An open-ended one removes your leverage at exactly the moment detailed terms get negotiated.
Due diligence.
Due diligence is where the buyer tests what they think they’re buying. Expect three strands: financial (revenue, fees, platform and provider data, contracts), regulatory (compliance arrangements, file reviews on a sample of client files, complaints, FCA correspondence, professional indemnity history), and legal (the company itself, its contracts, its people, any liabilities).
For a typical advice firm it runs a couple of months, longer if the records are patchy. It feels intrusive because it is. The way through is to have prepared: a seller who built the data room in advance sets the pace, while one still hunting for documents on request loses time and credibility with every delay. And most price cuts aren’t really negotiated at all. They get conceded here, in diligence, when something the seller promised turns out not to be documented.
The legal stage: share sale or asset sale.
Most whole-firm transactions are share sales: the buyer acquires the company, and the company carries on being the authorised firm, with its client relationships, contracts and history intact. The alternative is an asset sale, where the buyer acquires the client bank and goodwill out of the company. Asset sales can suit smaller books, but they typically require client consents or novation of agreements, which adds friction at the client end.
In either case the sale agreement will contain warranties (statements of fact about the business that you stand behind) and usually indemnities for defined risks, with pre-completion advice liability the main one in this sector. Buyers commonly ask for longer protection periods on regulatory and advice matters than on general commercial warranties. Your solicitor will negotiate scope, caps and time limits. This is a normal part of every advice-firm deal, not a sign of distrust.
Expect restrictive covenants too: undertakings not to compete or solicit clients and staff for a period after the sale. These are standard. Make sure they fit your actual plans, especially if you intend to keep advising within the buyer’s group.
FCA approval: the change in control process.
A share sale of an FCA-authorised firm cannot complete without the regulator’s prior approval. The buyer must submit a change in control notification under section 178 of the Financial Services and Markets Act 2000. Once the FCA treats the notification as complete it has up to 60 working days to assess it, which it can extend once, by up to 30 working days, while it asks for further information. Completing a transaction without approval is a criminal offence.
So the regulatory step sits firmly on your deal timetable, usually adding around three months between signing and completion. The process, what the FCA looks at and what tends to slow it down are covered in the change in control guide.
Completion, and the part that actually matters.
Completion day is a milestone, not the finish line. The quality of the deal is decided in the following 18 months: how clients are told, how the handover is paced, whether the team stays, whether the service your clients were promised actually continues.
Good buyers plan this with you before completion, in writing: who tells clients and when, what changes for them (in a share sale, usually very little at first), how your own time winds down, and what support the firm gets from day one. If a buyer can’t show you a detailed integration plan for your firm, that tells you how the next two years will go. What clients experience, and the warning signs to look for, are set out in what happens to your clients when you sell.
This period also tends to carry your remaining economics. Where part of the price is deferred or linked to retention, the handover isn’t just good practice. It’s what gets you paid.
Timing.
Two timing points are worth knowing early.
First, it takes longer than most sellers expect. Allow 6 to 12 months from deciding to sell to completion. Then add the prep runway before, and a transition of 1 to 3 years after. Depends on the deal.
Second, tax. Business Asset Disposal Relief, which sets the capital gains rate on a qualifying sale, has been climbing in stages: 10% before April 2025, 14% from April 2025, and 18% from April 2026, all on a £1 million lifetime limit, with standard capital gains rates above that. What it means for you depends on your circumstances, so bring in an accountant early. Tax is worth planning around. It just shouldn’t be the thing that decides whether, or when, you sell.
Frequently asked questions.
How long does it take to sell an IFA practice? Typically 6 to 12 months from first conversation to completion, including due diligence and FCA change in control approval. Preparation beforehand and transition afterwards sit on top of that. Rushed processes are possible but usually cost the seller either price or terms.
Do I have to tell my clients I am selling? Yes, at the right moment, and how this is planned is one of the best tests of a buyer. In a share sale the authorised firm continues unchanged, so client communications usually emphasise continuity. Agree the communication plan with the buyer before completion.
Do I need a broker or adviser to sell? Not necessarily, but you shouldn’t negotiate alone against an experienced acquirer. Some sellers use a corporate finance adviser or broker. All should use a solicitor with advice-sector deal experience, and an accountant for tax. The information gap between repeat buyers and one-time sellers is real.
What happens to my staff? In a share sale, employment contracts continue with the company. In an asset sale, staff typically transfer under TUPE. Either way, ask the buyer to commit to its plans for your team in writing as part of heads of terms.
Can a deal fall through after heads of terms? Yes. The common causes are due diligence findings that surprise the buyer, funding problems on the buyer’s side, and regulatory timetable issues. Preparation deals with the first. Asking direct questions about funding deals with the second.
Debbie Dry is Group Acquisitions & Integrations Director at Loyal North. She has spent more than 25 years in UK wealth management M&A and was previously Integration Director at Succession Wealth, where she oversaw 57 acquisitions.
Loyal North partners with established UK financial planning firms whose principals are planning the next chapter. If that is you, an initial conversation is confidential and without obligation: For IFA principals.
This article is general information about how the market for advice firms works. It is not financial, legal or tax advice. Take professional advice on your own circumstances.