What to Look for When Purchasing a Book of Business

11 Dec

What to Look for When Purchasing a Book of Business

When faced with an opportunity to grow your firm by purchasing an existing book of business, it’s easy to get caught up in the excitement and plow forward with the transaction. And while the right book of business can catapult your business growth, the wrong book of business can bring years of headaches and problems. That’s why it’s important to know what to look for when purchasing a book of business and to carefully evaluate potential purchases before you sign your name on the dotted line.

Organizational Fit

The first thing to consider is organizational fit. When purchasing a book of business, it’s always best if you can purchase within your own organizational family, be it Ameriprise, Raymond James, Cetera, or another group. The benefits of “keeping it in the family” is that the book of business is already established on the same systems and processes as your own. This makes transitioning so much easier and faster.

Investment Style

When evaluating the composition of the book, look carefully at the financial product mix and investment approach that is used. Is it in line with your current book of business, or does it take an approach that is contrary or outside your current scope? Sometimes it can be good to expand outside of your scope in a way that is relevant and adds value to your current mix, but a style that is too different from your own approach can lead you into foreign, challenging, and even financially dangerous territory.

Client Focus

Another thing to consider is the clientele the book of business serves. Many advisors build their business by focusing on a key niche such as teachers, airline pilots, women entrepreneurs, etc. A book with a client base that you already serve not only makes it easy to engage with and serve those clients, it helps to further strengthen your own market position. In addition to serving the same client base, adjacent target markets are also a good fit. For example, if you currently serve female entrepreneurs, female executives are also a related market with similar needs and composition. An adjacent focus helps to broaden your niche without becoming too broad or general, while maintaining the strength of your differentiation.


Often when purchasing a book of business, not only is it wise to bring on a client base that matches yours, it’s also a good idea to retain at a minimum the key client facing staff who have long term relationships with those clients. As a result, it’s important to ensure that the culture and values the staff is used to is in line with how you operate your business. This helps to ease transitions on the people side of things and to help secure the buy-in and support of the new team members.

So, when weighing different books of business treat it like you would your March Madness bracket. Based on organizational fit, investment style, client focus, and culture, who would you most like to invite to the Big Dance? A high seeded book with the right stuff to take you and your team all the way, or a bracket buster that may create a few upsets along the way, but not get you to the final four?

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