The future sale of client bases

One of the interesting components of the current rearrangements of financial planners is the ability of some planners to look at the option of client banking for the future.

Similar to land banking, the practice is a hedge against future client acquisition costs and future availability.

Land banking is the practice of buying land as an investment, holding it for future use and making no specific or immediate plans for its development.

With client banking the practical aspect is that certain types of clients already have an income component. These can be people with insurance products or those already paying modest fees for advice or the potential to require advice in the future.

There are some positive components to both sides of the equation – for vendors and the acquirers of client bases.

The acquirer gains access to potential clients and the income they can generate through fees and consultancies.

This means the acquirer has a reserve of clients who may require advice or product in the future in areas such as aged care, SMSF’s, FUM allocations, shares, property, superannuation (consolidation), insurance and/or estate creation, protection and maintenance.

Characteristics such as the age of the clients, type of products or lack of them, occupations, geographic location, type of client (PAYG, Professional, Small Business etc) and ethnic groups are important to potential acquirers.

Vendors gain such things as a cash component for the sale, having a higher average fee per client (if they sell off the lower end of the client base) and a tidier client base for a future sale.

There is also the fact that many smaller practices have the capability to service more people with their current operations- scalability. An increase in the size of the annual revenue can also make the business more attractive for sale in the future.

With many advisors looking at exit strategies this is an excellent opportunity for vendors to enter supportive arrangements for their clients in the future.

At Knowledgemaster we have over 300 people registered with us nationally looking to acquire businesses and client bases. If this type of opportunity interests you, please let me know by giving me a call on 0408 520 453 or drop me a line at

A simple discussion to discover your options and present your opportunity to our community for your business or part of your client base is a sensible discussion to have, isn’t it?