Shea Sanche, certified financial planner and founder of Insight Planning Wealth Management at IPC Securities in Kelowna, B.C.Supplied
In Buy the Book, advisors discuss their experiences acquiring a book of business, from practice valuation to client retention.
Shea Sanche, a 49-year-old certified financial planner and founder of Insight Planning Wealth Management at IPC Securities Corp. in Kelowna, B.C.
After more than 20 years in the wealth management industry, Shea Sanche founded his own advisory firm in 2022, focused on financial planning.
“I’d spent years inside big corporate environments where success was measured in sales, not relationships. I wanted something more aligned for my clients, my team and me,” he says.
Mr. Sanche employs another financial advisor, a mortgage specialist, four client service and marketing staff members, and one administrator.
Insight Planning Wealth Management’s head office is in Kelowna, B.C., and it also has a Toronto office. About 60 per cent of clients are based in British Columbia and Ontario, with the remaining 40 per cent in the Prairie provinces.
“With today’s digital tools, proximity doesn’t limit our ability to serve clients,” he says. “Clients love the convenience of being location agnostic, especially the ones who winter down south.”
The book
Mr. Sanche met the advisor from whom he purchased the book of business through an acquaintance who was a mutual fund wholesaler. He describes the seller as a “thorough, conscientious person,” who believed in doing extensive due diligence on prospective suitors. The seller felt he needed to do right by his clients; he was a standalone advisor with no staff or succession plan.
“He was everything from the CEO to the janitor,” Mr. Sanche says. “And he reached a point at which he needed something more for his clients.”
In 2022, the book featured 60 client households, mostly clients aged 60-plus, who had lasting relationships with the seller. Mr. Sanche says they were established professionals and business owners.
“What made them ideal wasn’t the size [of their assets], it was their mindset,” Mr. Sanche says. “They weren’t just loyal, they were engaged. They’re responsive and used to professional advice – exactly the kind of clients who fit our [financial] planning-first culture.”
The seller ran an organized and compliant practice, which Mr. Sanche says reduced post-sale friction and enhanced long-term value.
The price
Mr. Sanche paid 3.25 times recurring revenue for the book, more than the industry average of 2.5 times.
“We were willing to pay more because this book was an exceptional fit, both philosophically and strategically,” he says.
Mr. Sanche had previously purchased three other books of business. His standard agreement is to pay 90 per cent upfront, with a 10-per-cent client retention holdback. The holdback is contingent on how many clients remain after one or two years.
“That structure ensures both parties stay aligned on the client experience – it’s a shared incentive for continuity," he says.
But for this most recent book of 60 households, he didn’t hesitate to pay 100 per cent upfront.
“We have to be very confident to make that level of commitment,” Mr. Sanche says. “We close with our own capital. We have arrangements in place with private equity and lenders, so sellers can move into the next chapter.”
The transition
Mr. Sanche’s mantra as successor is that no client should ever feel like they were bought or sold, and he doesn’t rush the transition.
That requires a united front from seller and buyer when communicating with clients, focused on their shared philosophy.
“We approached the transition with empathy and structure, with joint client introductions, consistent communication, and a promise to preserve [the previous advisor’s] legacy of care,” Mr. Sanche says. “Today, those same clients enjoy the same personalized attention, just with a broader team supporting them.”
While the clients were invested in traditional mutual funds, Mr. Sanche says he has since modernized their portfolios into lower-cost, fee-based accounts with more tax efficiency, where appropriate.
“We also reviewed all existing insurance plans and made updates where necessary, ensuring every client’s coverage aligns with their overall financial plan and estate goals,” he says.
Another notable development was bringing younger generations on board as clients. With Mr. Sanche at the helm, he and the seller were able to attract many of the clients’ adult children and grandchildren, and Mr. Sanche’s team allows for different perspectives across age levels instead of just one voice.
Advice for buyers
Mr. Sanche says buying a book is not for the faint of heart, and expectations need to be defined clearly, like in a marriage prenup.
He also underlines the responsibility advisors have for the clients they acquire.
“This is somebody’s legacy you’re responsible for,” he says. “At the very minimum, you’d better be doing at least as good a job as the seller. You’ve got six months to prove you’re as good or better, so be ready to execute.”
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.