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Solid handover could prevent purchasing problems

Mortgage broker and financial planner Sue Warren from Topline Enterprises has experienced some serious dramas with her new client book. She tells us how she believes brokers could avoid such issues in the future.

Video transcript below:

Reporter:  Buying another professional’s business whatever the industry is a daunting prospect filled mostly with fears over client retention.  But how can brokers protect themselves against a bigger threat, potentially forged or devious sellers.

Sue Warren of SJS Topline Enterprises was alarmed earlier this year when the man she had purchased her client book from began poaching back clients.  

Sue Warren, SJS Topline Enterprises
Sue Warren:
 One of the pitfalls on buying my business I thought I had our terms were cleared off because the advisor was moving out of the business in its sum completely.  But two years later, two and half years later he decided to come back and attack the top 20% and that in itself is devastating, because he’s already had that relationship with the client and you know some went across, some stayed because they were happy.  The thing was though they were his clients initially.

Reporter:  Warren feels that this situation would not have occurred had the seller been locked into an origin agreement about both the purchase and the practicalities of the handover period.  

Sue Warren:  Really lock them in your agreement again for six, 12 months because by the time you get around to all your clients, it is a 12 month period.  So they need to be sort of be there for that 12 month period.  My handover was I think 2 hours, that was pretty frightening when you think about the size of the business that I purchased.

Reporter:  Warren urges the use of personal touches such as handover videos, so purchasers may both gain the trust of the new client base and bring their relationships with the seller to a natural end.

Sue Warren:  If you bought a large business which I did – 800 clients, that’s a lot of people to try and get around in a very quick period of time, but if you have e-mail addresses and everybody is on e-mail, you shoot them off an e-mail coming from the old advisor, quick introduction and all of a sudden they know who you are.  Most people when they realise you’ve bought a business, they will google you, they will go on and pull up the business profile, have a look through your website, but if you have a video of the old advisor that’s going out of the business and you being the new advisor and having an interview, a very informal interview about what was happening, of advisor selling his business for the reasons that he is doing it, whether it’s going into a family business or out of the industry completely or retiring and then you coming in and what you can actually offer.

Reporter:  However, despite her ordeal, Warren is positive that her remaining customers will help her build back any business she may have lost.

Sue Warren:  It’s not the end and it’s interesting because I know all this confrontational attack that happened in January this year, I know in January next year my business will look completely different.  I would have attracted all the people that fit my profile I guess, that want to be there, that I am referring business through.  I have got the referral partners now that have gotten out there and found and brought in.  So it’s, it just pushes you I think to the next stage.