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An often overlooked but nonetheless crucial determinant of a successful acquisition is a firm’s communications planning. Retiring IFA founder Stephen Hagues looks at how you can convey your message most effectively

Successful Client Communications - Before, During and After an Aquisition

When it comes to acquiring another business, it is only natural for those involved to expend most of their energy and focus on the sale process itself. After all, finding the right business to buy and then carrying out the necessary due-diligence to ensure you are getting what you are paying for is an undertaking that understandably absorbs the attention. 

At Retiring IFA, however, we have seen how an often overlooked but nonetheless crucial determinant of a successful acquisition is a firm’s communications planning. Just because you have paid up good money for a firm does not mean you are also automatically handed some sort of ‘golden ticket’ for the future. Effort must be put into communication to realise the full value of an acquisition and make it a complete success.

Before you even begin negotiating a heads-of-terms agreement, you need to be careful who you tell about a sale. Presented incompletely or in the wrong way, talk of a possible sale can worry clients into jumping ship before a deal has even been made.

The shift to a fee-based world and an ever-expanding array of advice options – include the possibility of obtaining it online – has made clients more demanding and open to being swayed by other avenues. During any period of uncertainty, clients are sensitive to dips in communication and service so consistency of messaging is key. 

Early and frequent communication about an acquisition is essential. This could perhaps be achieved through inviting clients to a seminar or else direct communication from client-facing employees can help reassure them the proposed move is good news. 

In the absence of such communication, the unwelcome conclusion clients may draw is that an acquisition is being made solely with the aim of cutting costs – a common enough reason behind many mergers. More often than not, an acquisition will indeed offer the prospect of operational synergies so demonstrating you are developing in order to enhance what you offer rather than simply to survive is important.

Inevitably, some changes that are made in the wake of an acquisition will not necessarily be immediately positive ones, but the way to communicate this as effectively as possible is to bundle bad news with good news. Some financial services firms have, for example, used special promotions and new product introductions to demonstrate the benefits of a merger or acquisition.

One of the easy traps to fall into is one-way communication with your clients. Successful merger and acquisition communications maintains an open two-way dialogue with clients, seeking their input and listening and acting upon it. Advisers already collate huge amounts of client data for compliance reasons and segmentation of this data can help tailor communications. Split clients into ‘promoters’, ‘passives’ and ‘detractors’, for example, and ensure feedback is delivered directly to employees who can learn from and act upon it.

It is also worth remembering that you and your staff are not the only ones communicating with your clients. The best way to control your communication is to map out all your different client segment audiences. Then, for each group, define their issues and concerns, your primary communications objective, what your main takeaway message will be and what media/channels you will use to reach them.

Another common mistake is to share too much information with your staff before the deal is near to completion. Avoiding panicking your workforce is essential because, although you naturally feel an obligation to your employees and they know and trust you, there is absolutely no need to worry them with uncertainty before you have a clearer idea of what will happen.

Do not forget either that clients do not necessarily have the closest relationship with the owner of the business. It may well be the person who deals with them most frequently – usually their consultant. Not only is it important to communicate effectively with your workforce to keep your firm’s talent and expertise on board but also to prevent losing clients as a result of staff leaving the business.

Staff meetings should be held immediately after the sale to allow you to explain the benefits and purpose of the merger or acquisition. As a leader, communicating to staff in a clear, unified voice and identifying talking points is useful to help keep the desired message consistent. Staff can be instructed to relay these talking points to clients and it is critical for them to have consistent responses to any likely questions. 

Consistency in messaging is fundamental to client retention. Train staff in how to answer – and ask – questions. Also, they need to be able to anticipate questioning sequences and answer them assertively and with confidence. These are the people who will implement your communication plan – so they need to be trained to be prepared.

Client retention is always a priority for any advisory firm but it becomes even more so in an acquisition situation. Clients from the acquired firm need to be brought on board while your existing clients need to be reassured.

Experience has taught us the key to obtaining full value from any merger or acquisition is effective communication with both staff and clients. By the same token, poor communication is one of the most common mistakes that can result in advisers losing clients after an acquisition. To find out others – and help to avoid making them yourself – you can download free eBooks here

Stephen Hagues is the founder of Retiring IFA, a group of consultants who sell, merge and source adviser businesses for adviser purchasers as well as offering retirement, merger and exit strategy advice to adviser business owners. Sister company Foundation Resourcing is a talent acquisition specialist that has been operating in the financial services space since 1999


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