Retiring as an IFA can be quite unsettling as there are many considerations and concerns which can make the process a bit daunting. There are lot of considerations such as leaving your clients in safe hands through effective succession planning, finding the right buyer for your IFA business or aptly timing your retirement date.

This article will explain the process of retirement while providing expert advice and guidance that can help you retire from your IFA business hassle-free.

Why thinking about Retirement is important

Gunner & Co., the UK’s leading IFA M&A brokerage and consultancy business have found that retirement is the key driver to change in ownership. In 2023, 66% of respondents cited retirement as the main reason for selling or stepping down from their IFA business, especially with the number of IFA owners reaching the age where retirement is an important consideration.

The same survey found 79% of financial advisers included succession planning in their annual business cycle plan. These results demonstrate that thinking about the future of your IFA business and planning ahead is a natural thing to do and many IFA business owners are in the exact same position.

Although reasons for retirement might vary and not everyone who is selling their IFA business is retiring, but planning ahead and evaluating your options can make the retirement process a lot easier and ensure that you can optimise the value of your business, and your clients are getting the best financial advice available.

Find out more about the results of the survey and discover trends or insights into the M&A market for IFAs and other financial advice businesses, in Gunner and Co’s Annual Survey Report in 2023.

Thinking ahead and getting your house in order

Although owners of IFA businesses are more than capable of determining if they are financially sound and can retire comfortably, there are other important considerations that need to be made as a result of your retirement.

Retiring from your IFA business can have significant tax implications, including capital gains tax, and income tax considerations, etc. Working with a tax advisor can help you minimize your tax liabilities and maximize your retirement income. By carefully planning and strategizing your finances, you can make the most of your retirement savings and assets while minimising the impact of taxes.

Planning your Succession

There are a variety of different options and considerations for succession planning when you retire, such as selling your IFA business. These include the type of buyer you’re looking for, whether you sell it before you leave or stay.

If you’re planning on selling your business, then finding and evaluating different buyers for your IFA business is crucial. The process of selling your IFA business requires a thorough approach and includes a variety of considerations.

From researching different buyers, to the deal negotiation and due diligence; selling your IFA business needs to be as strategic as possible to ensure you get the most out of the sale and your clients are in trustworthy hands so that they have a seamless experience.

Learn more about the IFA business sales process >

Whether or not you plan on staying or leaving when you sell your IFA business is also key consideration. Some IFA business owners prefer to stay within the business after their retirement and maintain a level of authority that allows them to influence important decisions.

If you’re thinking of staying on post-sale, then you’ll ideally have to decide on this before your business is put on the market as buyers will want a clear understanding of your position, how much you will earn, and how much control over the business you will have.

Managing Regulatory Compliance

Legal and regulatory compliance considerations is a particularly important consideration as it can impact the overall success of an IFA business merger or acquisition.

An IFA is subject to various regulatory requirements and compliance obligations. When retiring from your business, you’ll need to ensure all regulatory obligations are met, including notifying the relevant authorities and transferring client accounts to the new advisor seamlessly. Failing to comply with regulatory requirements could result in legal and financial consequences, so it’s essential to stay on top of these obligations throughout the retirement process and make sure that everything is done above board.

Hassle-free Retirement from your IFA business

Now that we’ve explored the various considerations for retirement from your IFA business, hopefully you have a better understanding of the process and feel like you can make a more informed decision.

Ultimately, extensive research and preparation can make the process of leaving your IFA business smoother, so that your best interests are at heart and the sale doesn’t affect your well-earned retirement in any way.

Get in touch with the expert team at Gunner & Co. for more guidance on selling your IFA business >