Welcome to The Plot, our bi-weekly periodical designed to empower wealth management executives. Through a structured essay series, The Plot aims to inform and empower owners / managers to take greater control over their business exits.  Each issue delivers actionable insights and strategies drawn from real-world M&A experiences, specifically curated for managers contemplating or actively pursuing a sale.

The Plot aims to offer fresh perspectives and practical guidance to navigate the complexities of M&A.

This blog is dedicated to the memory of Julie Wilson, whose inspiration, resilience, and forward-thinking vision were instrumental in shaping its creation.

 

In This Issue

Holding Strong In A Sell Heavy Environment

 

In this issue, we challenge the status quo with a question few dare to ask: What if selling your wealth management practice is the wrong move? Everyone tells you selling is the goal—the ultimate prize. But what if the real value lies in holding on? What if selling means giving up control, sacrificing long-term wealth, or walking into a future you regret?  Before you make your move, consider not selling first. Because in M&A, the biggest mistakes aren’t just about what you do—they’re about what you don’t see coming. And what you don’t know can cost you everything.

 

Contributions From

Andrew Richardson | Managing Director | Equinox Financial Planning

Stuart Finnie | Director | Kyle Consulting

Steve McLean | Founder | AND Capital Projects

 

Dedication

The Plot is forever dedicated to the memory of Julie Wilson, whose inspiration, resilience, and

forward-thinking spirit helped to shape its creation.

 

 

 

The Case for Staying Independent

 

In a market that often glorifies the sale of a business as the ultimate success, staying independent can be a radical act of defiance. Many owners of wealth management firms are pressured by market trends, M&A advisors, or personal circumstances to sell, but for some, holding on may yield more value in the long run. Retaining control of your business allows you to chart your own course, without having to bend to the will of new ownership or corporate demands.

Selling might give you immediate financial gain, but independence offers long-term revenue streams, particularly if your firm is profitable and growing. Additionally, your close client relationships—the trust and loyalty you’ve built over years—might not be the same under new ownership. In fact, it’s often these personal connections that make smaller firms more attractive to clients than large institutions.

 

Beyond money, staying independent allows you to maintain your personal values and vision. You can continue to innovate without having to justify your choices to external shareholders. You also have the freedom to craft your firm’s culture, ensuring it aligns with your beliefs and priorities. In contrast, selling could mean adopting new systems or practices that conflict with your approach.

 

Stuart Finnie, Director of Kyle Consulting

 

“In a sales profession, you either deal with a salesperson who is looking to achieve their desired outcome, or you deal with a true adviser. A true adviser explains the pros and cons of each of the available options and then helps the client decide the best option for them. When you come to consider the best options for your business, you need a true adviser. You should consider the warts and-all scenarios because you do this only once, and life is too short for regrets. A sale might ultimately be the best option for you, but don’t rush into that decision without letting someone comprehensively guide you through all your options.”

 

This seller’s experience illustrates the transformative power of staying independent. Guided expertly over two years, they explored every avenue, including a potential sale, before ultimately structuring an internal agreement that allowed them to retain ownership. They reflect:

 

“This has been positively life-changing for all involved, and without the patience, knowledge, understanding, and acumen of our adviser, we could have otherwise made a poorer decision.”

 

Their story is a testament to the freedom, control, and satisfaction that independence can offer. Ultimately, independence brings freedom, control, and the ability to pursue your own version of success, one that’s more satisfying than an immediate cash-out.

 

Beware of Buyer’s Promises

 

The allure of a buyer’s promises—higher valuations, smoother transitions, or exponential growth post-sale—can be hard to resist. But beware: the M&A landscape is littered with sellers who regret trusting these rosy predictions. Buyers often make an enticing offer, only for sellers to discover that post-sale life is fraught with unexpected challenges. Buyers can overpromise on everything from valuation to the future management of your firm. The idealised “smooth transition” they present may hide difficulties in client retention, cultural mismatches, and operational hurdles. Employees may feel alienated by new management practices, and clients might leave when they sense a shift in service. These disruptions can be far more damaging than anticipated, leaving the seller frustrated.

 

Andrew Richardson, Former Director of Pen Life Associates

 

“We had a number of conversations with interested parties and discovered a wide-ranging estimate of our business’s valuation. Each potential buyer required different levels of change—from relocating the firm to reducing staff numbers.”

 

After extensive discussions, Andrew and his business partner, Julie Wilson, initially chose to sell to a national company. However, as the details of the deal unfolded, concerns emerged.

 

“It became apparent that, although the headline valuation was very attractive, the risk we were taking on—particularly in securing the second, third, and potentially fourth payment—was significant. These payments were heavily dependent on future performance.”

 

Upon further analysis, Andrew realised that many of the buyer’s conditions were outside his and

Julie’s control.

Earn-Outs: A Trap in Disguise

 

The financial aspect of M&A is rarely as straightforward as it seems. Earn-outs—often touted by buyers as a win-win—can be a double-edged sword. They tie a portion of the sale price to future performance, which the seller may no longer influence. The result? You might walk away with far less than expected, all while shouldering post-sale stress.

 

“Taking the worst-case scenario, we could have ended up receiving only 50% of the estimated

valuation due to circumstances like stock market corrections. We countered by proposing a

performance-based upside—if the business exceeded expectations, we would receive additional

funds on the same basis. That idea was, unsurprisingly, dismissed outright.”

 

An Alternative Path: Employee Ownership Trust

 

Beyond financial considerations, Andrew and Julie were deeply committed to their staff and clients. After reviewing the contracts, they decided to take a different approach: an Employee Ownership Trust (EOT) as a more sustainable and tax-efficient way to exit the business.

 

“We were particularly keen to look after our team. Transitioning to an EOT allowed our senior staff, who had been instrumental in our growth—to take over the business. This secured our firm’s identity, preserved client relationships, and ensured continued employment for our entire staff.”

 

Three Years Later: The Outcome

 

Now, three years into the EOT journey, the business is thriving under its employee-owners. “Of course, there were inevitable teething issues, but the firm has gone from strength to strength. The significant upside of this transition was that it enabled those who helped build the business to continue its success, protecting both our legacy and our people.”

 

Sadly, there was one tragic exception to this success: Julie Wilson passed away in 2021. Her vision, dedication, and leadership remain embedded in the company’s DNA. Her legacy continues, not through an M&A deal that left the future uncertain, but through an employee-owned firm that safeguards its people and principles.

 

A Lesson for Sellers

 

Before signing on the dotted line, remember: not all buyers deliver on their promises, and not all sales result in long-term success. If you’re considering a sale, ask yourself:

• What happens if the earn-out conditions aren’t met?

• Who truly controls the business’s future post-sale?

• Is there a more sustainable way to exit—one that protects both value and people?

 

Building Wealth Without Selling

 

Selling your business internally or externally aren’t the only path to financial security. There are several strategies that allow you to build wealth while retaining full ownership of your firm. One of the most powerful is organic growth—expanding your services or client base from within. By identifying new market opportunities or offering additional advisory services, you can boost profitability without having to relinquish control.

 

Another option is to enter into strategic partnerships or alliances. These can give you access to resources or clients without the need to merge or sell. Joint ventures or referral arrangements allow you to grow your firm’s reach while maintaining your independence.

 

Diversifying your revenue streams is another effective strategy. By exploring new offerings—whether that’s estate planning, tax advisory, or wealth management for niche markets—you can generate additional income and bolster your firm’s resilience. This also reduces reliance on any single market segment, making your business more stable and better prepared for market fluctuations.

 

Finally, reinvesting in your firm by upgrading technology, hiring key talent, or expanding your client base can significantly increase your firm’s value over time. Rather than seeking a one-time payout through a sale, these efforts can lead to sustained financial success and future growth.

 

Legacy Over Liquidation

 

For many business owners, the legacy they leave behind is just as important as the wealth they’ve built. Selling your firm might provide a quick financial windfall, but it could also mean the dilution, or even destruction, of the legacy you’ve worked hard to build. Buyers, particularly larger corporations, often prioritise profitability over preserving a firm’s unique culture, client relationships or values.

 

When you sell, you give up control over how your business evolves. Will the new owners maintain the personal touch that drew clients to you in the first place? Will they value the same long-term relationships, or will they push for higher margins at the cost of client service? In many cases, the original ethos of the business can be lost, as buyers implement their own systems, priorities, and practices.

In Closing

 

Choosing not to sell is a bold decision in a market that celebrates exits. It’s a commitment to your values, your clients, and your vision for the future. Selling isn’t the only measure of success, sometimes, the greatest reward lies in holding onto what you’ve built and taking it even further. Staying independent allows you to shape your business’s future while staying true to the values that have guided you. Rather than liquidating your firm and watching its identity dissolve under new management, you can focus on building something that endures, a brand that reflects your principles and continues to serve your clients in the way you envisioned.

 

Many Thanks

 

S.