Buying a retiring adviser's book is rarely a plug-and-play transaction. When you force legacy clients into modern fee structures and investment propositions, attrition spikes. Use this tool to calculate the true payback period.
Time required for net profits to cover the purchase price.
High Risk Transaction. A payback period over 7 years is extremely dangerous. The risk of market drawdowns, regulatory changes, or further attrition before the deal breaks even is too high. Negotiate a lower price or strict performance-linked earn-outs.
Standard Market Deal. This payback period is typical for the current market. Ensure you have the operational capacity to absorb these clients without destroying your margin.
Highly Accretive Deal. If your attrition assumptions are realistic, this is a highly profitable acquisition.