Buying a practice should be more like buying a house.
While on the phone with a lender to financial advisors a few weeks ago, something made me feel uneasy. When an advisor is in the process of purchasing a book all parties should want an objective inspection of a practice before you buy or lend, right?
The bank says no.
The selling advisor usually doesn’t want it either.
What are they hiding from? The buying advisor should demand it!
Why isn’t it a requirement to have an inspection done on a practice before buying? Advisors are buying practices on a handshake? What year is it and who does business like this?
This is exactly what the financial services industry does, and it’s insane.
Getting a BAR report, the numbers, a client list, and a valuation should not be enough. What are you really buying? Do you know how their practice runs? Do you know what the staff is like? Are you keeping the staff, and if so, for how long? What do their clients say about working with the selling advisor? What do they like? What do they dislike? What are you buying???
If you are going to buy a practice, get it inspected. Who does inspections? We do and we’ve been doing it for years.
Know what you are buying, invest in an inspection today.