Michael David is a Toronto-based financial writer and has more than 20 years’ experience consulting with large financial brands. Michael began his career as a Financial Advisor managing his book of business with one of Canada’s largest private wealth management firms.

Building an advisory practice is hard work. So is preparing it for sale and connecting with the right buyer. When you finally make it to the last mile, you want to make sure that you have a successful close.

Not even a long career spent providing others with investment advice can fully prepare you for selling your advisory practice. For most, it will be a once-in-a-lifetime experience that combines opportunity, complexity and, often, a good dose of anxiety.

Here are some tips to help reduce the risk of anything going wrong:

#1 Know your terms

When working with a buyer, there may be multiple points of negotiation happening at once. This could relate to purchase price, revenue sharing arrangements, which assets are included, who will do what during the transition, how long the whole process should take and more.

Write down the deal terms that matter to you. Rank them in order of importance. Know where you are willing to negotiate and where you are not. Then don’t sign the deal until you are crystal clear about what you have agreed upon.

The risk is that you realize something is amiss or have a change of heart at the last minute – and that has the potential to damage trust and potentially sink the deal.

#2 Understand any conditions

It’s easy to get so focused on the selling price and payment terms, that you don’t fully consider what would happen if some aspect of the transition doesn’t go as planned. This is not unlike investment clients who focus so much on returns that they forget to consider risks.

For example, a buyer may want a clause in the deal that results in a penalty or claw back if they aren’t able to transfer over a certain amount of assets within a specified time frame.

You don’t want to be caught by surprise either because you did not fully understand the conditions of the deal or because something doesn’t go according to plan. Getting professional legal advice can help reduce this risk.

#3 Be open – but not too open

It’s important to establish open rapport with the buyer of your practice, especially if you’re going to be working shoulder-to-shoulder for weeks or months as you transition your clients over.

However, during the negotiation, it’s crucial to avoid sharing information that could reduce your leverage. For example, if you have no other offers on the table, that’s a piece of information you might be better off keeping to yourself.

One strategy that can help is to have a partner on your team who can play “bad cop” when you need it. Whether it’s a trust friend or your professional legal advisor, it’s sometimes valuable to have someone who can step in and say, “we’d rather not comment.”

#4 Manners matter

Good manners are not only polite, but they can also be an asset at the negotiating table. You want a potential buyer to be flooded with positive emotions when they think about you and your practice.

Arrive on time to meetings. Dress and behave like you would if you were seeing your very best client. Keep the conversation positive at all times. Any form of gossip or complaint, no matter how justified, could create an unfavorable impression.

If the negotiation gets tense, it’s generally not productive to become hostile or to openly question the motives of your counterpart. Instead, shift the conversation to reaffirming the outcomes you both want and how you can work towards them in a cooperative manner.

#5 Stay grounded

Selling your practice can be exciting and stressful.

If excitement takes over, there’s a risk of glossing over important nuances. Be sure to take time to plan how you will handle each aspect of the deal and the transition – including the reality of getting all of your clients on board with a new advisor and potentially having to sign a mountain of applications and transfer forms.

At the same time, try to keep stress at bay. If you don’t already have good stress management practices in your life – like proper rest, diet, exercise, and social support – now is a great time to take intentional steps towards putting them in place. It could help you avoid burning out and making careless mistakes.

Like many major milestones in life, there will be a time when you can put your feet up and look back fondly. But until the ink dries, having clear goals, an analytical approach, and disciplined behaviour are invaluable ingredients to help you seal the deal.

All comments presented here represent the views of the speaker and are not necessarily those of Home Trust Company. Tools mentioned and examples provided are for information only and do not constitute an endorsement or recommendation. This presentation does not constitute legal or financial advice.