By Jerry Butler 


The financial product business is one of the most unique businesses in the market place today. There are very few businesses available that will pay the owner recurring income just for being the owner!! In addition, those clients can be sold additional products.

A consortium of technology companies recently purchased bankrupt company Nortel Networks for
$4.5 BILLION. Why would anyone spend billions for Nortel? Because Nortel owns 6000 patents that are or could be leased out. Recurring income is generated only because you are the owner – this is a very desirable business model. In addition, they can develop those patents into their own product line up.

Financial advisors are now starting to treat their business as a business and are creating wealth for themselves and their families. The next step is to do some formal Succession Planning.


The average age of an advisor in United States is 52. It is probably similar in Canada. The baby boomers are starting to get into their 60s and thinking about selling/retiring. Oftentimes, advisors plan on slowing down or semi-retiring. All of things indicate Succession Planning should be considered in order to
maximize the value of their business.


According to the Canadian Federation of Independent Businesses in a large and comprehensive survey of Small and Medium Enterprises:

  • 34% of business owners plan on selling in less than or equal to 5 years.
  • 32% of business owners plan on selling in 6 to 10 years.
  • 52% of businesses have no Succession Plan.
  • 38% have a “plan” but nothing in writing.
  • 10% have a formal professional Succession Plan.

In the U.S. for every financial advisor business listed for sale there is an average of 50 offers (F P Transitions). I think this is even higher in Canada as our market is even more undeveloped. The average age of a seller is 58 and the average age of the buyer is 48. FP Transitions handles 500 transactions a year so they have statistically significant numbers. 98% of all sales in the U.S. involve a
vendor take back. Most deals also involve an earn-out clause. Queenston’s experience is similar. Deals in Toronto have resulted in 100’s of interested buyers.

The bottom line is right now there is a huge overhang on the buyer’s side. We are currently in a seller’s market yet most advisors do not go to the Open Market when selling. It is safe to say this is costing sellers tens and hundreds of thousands of dollars! This overhang will not last as there are many more
advisors in their 50s and 60s than there are in their 30s and 40s.

The time for Succession Planning is NOW.


Shopping Cart
Scroll to Top