Amanda Van Soelen, a certified financial planner with Lumin Way Financial at Designed Securities Ltd. in Guelph, Ont.Trina Koster/Supplied
In Buy the Book, advisors discuss their experiences acquiring a book of business, from practice valuation to client retention.
Amanda Van Soelen, a 47-year-old certified financial planner with Lumin Way Financial at Designed Securities Ltd. in Guelph, Ont.
In 2010, financial planning was the furthest thing from Amanda Van Soelen’s mind when considering a new occupation.
Ms. Van Soelen managed the company books for her family’s small millwright business in Guelph, something that didn’t take much time. She wanted a new challenge, ideally something that would work around her two kids’ school hours.
When a friend’s husband, a financial advisor, was looking for an assistant, she landed the job.
Early on, her boss commented that she’d make a great advisor.
“I’m not looking to get rich,” Ms. Van Soelen remembers thinking at the time. “This is just a job.”
But her appreciation of financial planning grew, and she earned her mutual fund and insurance licences (and later, her certified financial planner designation).
In March, 2020, Ms. Van Soelen and her family were driving to Florida for vacation when the pandemic suddenly shut down businesses. They decided to turn around and return home, where another surprise awaited – she had lost her job.
It wouldn’t take long for the next opportunity to come along. Ms. Van Soelen networked with women advisors virtually in hopes of finding an associate advisor position. Instead, she met an advisor looking for a successor. To Ms. Van Soelen’s surprise, the advisor liked her for the role.
“I can’t go from a licensed assistant to buying a rather large book,” she recalls thinking. “She saw something in me that I didn’t even see in myself.”
The book
The 350 clients were small business owners, retirees and middle-income families. Many advisors wouldn’t have touched some of the smaller clients, Ms. Van Soelen says, but she embraced them.
“I firmly believe everyone deserves an advisor,” she says. “It’s our giving back to the community. We don’t have a minimum [asset requirement].”
She also liked that the seller resided in her city. “There’s probably a dozen advisors within Guelph, so to find [a book] for sale is rare.”
Ms. Van Soelen also had an affinity for the business owners, having run the millwright business with her husband.
After a few months of negotiation, the seller hired Ms. Van Soelen to join the firm. She acquired the book in October, 2020.
“[The deal] came together fast, but we both felt it was a good fit and worked hard to make it happen,” Ms. Van Soelen says.
The purchase
Ms. Van Soelen paid the asking price of 2.5 times recurring revenue for the book.
The sale was an asset purchase, meaning no shares of the company transferred to her and any past liability issues with clients remained the seller’s responsibility.
She decided against a retention clause, instead paying the seller “a small salary” to remain on staff for two years to help with the transition.
Ms. Van Soelen paid half upfront, with the balance due at the end of the first year. Sixty per cent of the money came from a bank loan, which offered a more competitive interest rate than her dealer. The other 40 per cent was put on her home equity line of credit.
“My husband is self-employed and his millwright shop was also on our property,” she says. “If this doesn’t work, we lose everything. It was a major leap of faith.”
The transition
The handover was gradual, with Ms. Van Soelen and the seller conducting joint meetings. The seller led the meetings, especially larger and more complex cases. Ms. Van Soelen focused on getting to know the clients and interjecting where needed.
A year later, Ms. Van Soelen chaired the meetings and the seller took a secondary role. She says clients weren’t surprised when the seller announced her retirement. Business revenue boomed from referrals during the transition.
“They liked that their advisor cared about them enough to bring someone in before she was ready to retire,” Ms. Van Soelen says.
The seller ultimately exited the business in September, 2022 – a turbulent year for markets. Ms. Van Soelen pressed on, engaging in candid conversations with clients and emphasizing what could be controlled.
“I’m a good storyteller, which helped me keep clients calm,” she says.
More than 95 per cent of clients remained with Ms. Van Soelen.
Today, she runs an advisory practice with her business partner, Jessica Holvik. The women met years ago as their respective kids, now in their 20s, were in youth programs together.
They often took walks during the pandemic, where they talked about the industry. Recognizing the challenges of working alone, they decided to join forces last year.
For their new digs, they converted a Victorian townhouse into offices. They focus on financial planning, investments and insurance, and employ two associate advisors and five additional staff members.
Advice for buyers
Take a deep look at what you’re buying, Ms. Van Soelen says. She looked at everything from product shelf, portfolio asset mix, customer relationship management and compliance issues, and she reviewed notes taken during client meetings.
“You want to determine: Is this a clean book or a mess?” she says.
Are you a financial advisor or financial planner who recently bought a book of business? Globe Advisor would love to speak with you about your experience. Candour, especially around the finances, is appreciated, and your name and photo will be used for the column. Please e-mail dgage@globeandmail.com and include a brief synopsis of your situation.