ValidPath has launched its Client Buyout (CBO) Programme to help independent financial advisers (IFAs) exit or retire.
The programme offers a way for advisers to sell their client books and for others to grow through acquisition.
Angus MacNee, CEO at ValidPath, said: “The average adviser is now nearly 60 years old, and with more than half planning to retire within the next five years, thousands of businesses and client books will need to be transferred or acquired.
“For IFAs that value independence, consolidators can be off-putting, and DIY routes too complex.
“The ValidPath CBO Programme offers a simpler, independent alternative – supporting retiring advisers to execute their succession plans while empowering the next generation to grow via client-book acquisition.”
Over 50 firms have already registered during a soft launch.
ValidPath supports the process by matching buyers and sellers, handling the transaction from feasibility and matchmaking to valuation, due diligence, financing and deal support.
Buyers are required to be ValidPath members, while sellers can be any adviser, including registered individuals, appointed representatives or directly authorised advisers.
Buyers can acquire a seller’s client base and retain full ownership of their business.
They commit to a five-year plan as part of the acquisition financing and can access a marketplace of vetted sellers or find their own opportunities.
Support includes financing, template documents and guidance through the process.
Additionally, sellers receive an upfront payment and deferred payments over two years.
Once the client transition is complete, they can retire knowing their clients will continue to get independent financial advice from someone in the ValidPath network.
Laura Handy, succession development manager at ValidPath, manages the programme.
Handy said: “We know many advisers have the drive and capability to grow their business and support more clients, but lack the M&A experience or support to move forward with acquisitions.
“We bridge that gap by helping sellers to value their business and execute their succession plans with buyers that are supported throughout the transaction process and with a financing package that makes acquisition-based growth achievable.
“One IFA described our CBO programme as the ‘eHarmony of IFA matchmaking’.
“That’s positive feedback, and I am excited about the introductions we can facilitate in the future and the positive impact that can have for our industry.”
ValidPath uses Rimbal technology to automate and manage the process, allowing the team to handle hundreds of transactions at once.
MacNee added: “We want to help hundreds of advisers to achieve their exit and retirement objectives.
“We want to help hundreds of advisers looking to grow their businesses.
“The ValidPath CBO Programme was developed to support these objectives within an independent framework, and to ensure that clients can continue to receive independent financial advice into the future.”
He said: “We have assembled a fantastic team that has significant experience in M&A, buyouts, financing and making acquisitions successful, and we have built the technology to provide scalability and a good user experience for participants.
“I am excited about the opportunity that the ValidPath CBO Programme has to support the broader community of independent financial advisers, and across the full lifecycle of those starting, growing or exiting their business.”
David Ruler, from David Ruler Financial Planning, said: “As an Independent Financial Planner, my passion has always been about supporting more people on their financial journey.
“Growing my business through client book acquisitions enables me to extend that support to more individuals and families, while remaining true to my values of independence and personalised service.
“The ValidPath Client Buyout Programme gives me the tools and confidence to do just that and focus on what really matters: looking after clients.”
Angus Bunten, from The Aisla Partnership, said: “Through the ValidPath Client Buyout Programme I was introduced to a seller whose values align with mine; it’s rare to meet someone so likeminded!
“Our shared commitment to independent advice made the idea of a client buyout feel like a natural progression, and I’m pleased to be able to support these new clients with continuity of service and continued access to independent financial advice.”
