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More practices are coming onto the market than usual in today’s topsy-turvy market. But don’t get too excited, the marketplace is still lopsided in favor of sellers.

Still, for hungry advisors looking to expand through an acquisition, this is a good time to put your best foot forward, and here’s how to do so.

1. Understand the sellers’ psychology.

Many sellers prefer to remain coy about their intentions, because they feel that tipping their hand may reduce their leverage in negotiations. 

Michael Wunderli, a managing director of Echelon Partners, says that even when sellers call investment banking firms like Echelon, they’ll often obscure their purpose by saying that they’d like to discuss their “strategic options.” 

Buyers need to assess the game plan of sellers. It’s worth asking if they are “sell and retire” or “sell and stay” sellers, according to Wunderli.

Those who want to sell and retire want to find a suitable home for their clients and employees. They’re also typically looking for the best offer with the biggest upfront deal and the most favorable terms. 

Sellers who want to sell and stay may be especially interested in the buying firm’s platform and how it can help them grow their business. For example, will they have additional client offerings like securities-based lending or access to alternative investments?

Also, their longer time horizon might make equity an attractive deal component.

2. Show you can transition your business.

All sellers need to be assured that a buyer can successfully manage a transition and grow the business. This is a one-time event for most sellers, and they are understandably anxious.

Be prepared to explain how you will be able to transition and onboard his clients properly, says David Grau, founder and CEO of Succession Resource Group. “‘We’ll figure it out together’ is the wrong answer,” adds Grau. 

A buyer will need to demonstrate that they have the resources to simultaneously conduct their normal business and onboard the seller’s clients.

This will likely require additional staff with deep transition experience. Operational and technological capabilities must be up to snuff as well. 

Accounts will need to be repapered and converted into the new firm’s systems. Buyers will need to show they understand and can overcome any potential compliance roadblocks, too.

3. Get the deal’s financing taken care of early.

Based on a firm’s financials, bankers often specify the type of transaction that they are likely to finance, says Wunderli. Sometimes, they’ll even provide a prospective buyer with a letter or term sheet enumerating those details. 

Advisors who are getting financing from a partner or outside entity should similarly understand how much they’ll be able to borrow and the nuances of how the process works.

What kinds of transactions has the advisor or their broker dealer successfully closed before?

4. Have a sense of urgency and commitment.

Advisors should be expeditious in responding to any seller’s requests for information and meetings. 

Don’t undermine your case by taking too long to schedule follow-up calls, for instance. Your behavior must signal that you regard the potential acquisition as the highest priority.

5. Respect the seller.

Often an advisor is trying to acquire a practice that’s much smaller than his or own. This means some prospective buyers monopolize meetings, recounting the greatness of their firm and giving the seller’s observations short shrift, according to Grau.

Is that how an advisor would treat a $50 million prospect or client? “Advisors need to check their egos at the door. They should use the skills that they already have to listen and ask insightful questions,” explains Grau.

6. Have a continuity plan.

Multi-generational advisor teams who can appeal to clients of all ages and who have a built-in succession plan have an advantage in practice acquisition, says Grau. An energized younger advisor can also help an acquired practice grow. 

In a seller’s market, sellers have their pick of the litter, so it’s important to remove any potential disqualifiers. Sellers want to know that no matter what, their deal will get done. 

Continuity plans, especially for solo practitioners, let sellers know that their clients will be cared for and that extra payments (or “earnouts”) to sellers will be paid in the event something goes wrong.

7. Be likeable and focus on your firm’s special touch.

 Well-financed serial acquirers are scooping up a larger percentage of industry practices. They are tough to compete against, since they have deep pockets and boast an enviable track record of successfully completed deals, says Wunderli.

In this context, smaller buyers should aim to forge deeper relationships with sellers and stress the personal service they can provide to sellers and clients alike.

Related: 10 Steps to Buying a Practice in a Pandemic.