Biggest Roadblocks To The Sale Of A Financial Practice

The sale of a financial practice is a major event for the owner of the practice who spent years building the practice into a vibrant business. Considering all of the hard work that went into building the practice, it would seem that selling it would be easy. But for many sellers, especially those who try to go it alone, selling their practice can be the hardest thing they ever do.

Beyond the emotional roller coaster that can occur, there are a number of roadblocks that can manifest when a seller tries to go it alone. Those roadblocks can slow or even derail a practice sale. An informed seller, represented by a trusted expert, can easily navigate those roadblocks and arrive at a successful outcome with their client service reputation intact and a great deal of equity to take with them onto their next journey.

The Road Blocks

Unclear Goals

Before you get too far on your journey, it is important to understand and be able to articulate why you want to leave, by when, and what you want that transition to look like. An unclear vision for your practice transition and your personal future makes it difficult to evaluate a buyer for fit and to set clear expectations for the structure of the deal. The ambiguity that ensues creates confusion and opportunities for serious disagreements, which can turn a good deal ugly.

Inaccurate Valuation

It may seem like a good idea to save on a business valuation and instead guesstimate your value using a benchmark or other “rule of thumb” equations.

Unfortunately, those numbers aren’t based on sound and measurable factors that can be replicated and justified to a buyer, or to their lender. Most lenders won’t accept an internal valuation and will require a certified third-party valuation to support the purchase price and loan amount. Also, DIY valuations are often off the mark by hundreds of thousands of dollars. That is real money lost, money that could have been yours.


You don’t know what you don’t know, and that can significantly hurt you. Chances are you will only sell a practice once in your lifetime. There won’t be a second or even third chance to get it right. Smart business owners know their limits and hire trusted advisors to fill in the gaps. It’s important to bring in an experienced succession consultant at least 12 months and as early as five years prior to your projected exit date to help you start preparing your practice for sale.

Bad Match

The goal of the sale is not just to reach an agreement, but to get the entire practice through a successful transition. A critical factor of that transition is fit. A good fit is based on four key factors, which have nothing to do with price or a willingness to buy. Those factors are what ensure that the buyer is the right candidate to carry forward your client service legacy and to see the transition through all the way to the end.


A succession is an emotional process. It can be difficult to think clearly and communicate, especially when disagreements arise. A seller representing him or herself can’t create enough emotional distance to negotiate well. Also, as mentioned earlier, you don’t know what you don’t know. There are a number of pitfalls and conditions that you won’t know to negotiate for unless you are an experienced succession consultant. And any ambiguity in an agreement is a recipe for disaster. It’s better to use an experienced M&A expert to help negotiate on your behalf and to outline in detail all items of concern for both parties.


Even if you have a willing buyer who is a good fit, financing can hold up the actual close of a deal. Practice acquisitions were once largely buyer or seller financed, but now there are a growing number of lenders actively providing financing to the advisor acquisition space. Still, not many buyers know about them. Using a lender allows the buyer to get desirable terms while giving you the freedom to walk away completely, cash in hand, as soon as the deal is done. Many succession experts, like Advisor Legacy, know this and actively build relationships with qualified lenders who are experienced at handling acquisition loans for financial advisors.

A practice sale and transition are dotted with obstacles that can force you to change direction or stop completely. Knowing these roadblocks and what to expect is a start, but to truly navigate the terrain and arrive at a successful outcome, its critical that you build a team of trusted advisors who can guide you through the process and who will represent your best interest every step of the way.

Have Questions?

Whether your looking to buy a practice, sell a practice, or just want to explore your options, we can help!

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