Most sellers assess the offer and not the buyer. That is a reasonable instinct when the whole price is paid at completion. It stops being reasonable the moment part of the price is deferred, because a deferred payment is an unsecured claim on a business you no longer control, and its value depends entirely on that business still being able to pay.
The FCA has said something specific and relevant about how a portion of this market is funded, and it is worth reading as a seller rather than as an industry observer.
What the FCA actually found
In its multi-firm review of consolidation in the financial advice and wealth management sector, published on Fri 31st Oct 2025, the FCA concluded that consolidation can support efficiency and sustainable growth, while poorly managed integration risks poor consumer outcomes.
Two findings matter directly to a seller. The review raised concerns about debt-funded acquisitions, and about pressure on regulated entities required to upstream cash to service external debt. As good practice it identified clear group structures, strong governance, monitoring of group debt and comprehensive risk management.
The FCA introduced no new rules. It expects firms to reassess their risk management and group structures.
Read that second concern again with your own deferred consideration in mind. A regulated firm under an obligation to send cash upwards to service borrowing is a firm whose spare capacity is committed elsewhere. Your instalment is paid out of the same capacity.
Why this is your problem and not just the regulator's
Consideration paid over time makes you a creditor. Usually an unsecured one, ranking behind the lenders whose debt the FCA is describing, with no security over anything and limited visibility of the group's position.
If the buying group runs into difficulty, the order in which obligations get met is not the order in which they were promised. Secured lenders come first. That is not misconduct, it is how capital structures work, and it is precisely why the funding question belongs in your diligence rather than theirs.
This applies whether the deferred element is a simple instalment, a retention, or an earn-out. The performance risk in an earn-out is covered in when an earn-out underperforms; this is the separate question of whether the payer can pay at all.
Not an argument against consolidators
It is worth being fair about this, because the alternative reading is lazy.
Consolidation has been a substantial part of why the market is active and why multiples moved: EY records UK wealth and asset management deals rising from 47 in the first half of 2025 to 61 in the first half of 2026, with disclosed value moving from £0.2bn to £22.7bn. Many acquiring groups are well run, well capitalised and integrate carefully. The FCA's own finding is that consolidation can support efficiency and sustainable growth. Being acquired by a larger group is frequently the best available outcome for an owner and for their clients.
The point is not to avoid a category of buyer. It is that "who is behind the money, and what else is that money committed to" is a question you are entitled to ask, and one that almost no seller asks.
What to ask, and what to do about the answers
Ask how the acquisition is funded. Debt, equity, retained profit, or a mix. A serious buyer will answer at a sensible level of generality. Evasion is itself information.
Ask what the deferred payment ranks behind. If the answer is that it is unsecured and subordinate to bank debt, that is normal and you now know it.
Ask who the paying entity is. The company signing your agreement may be a holding entity with no trading income, whose ability to pay you depends on cash coming up from regulated subsidiaries. That is exactly the arrangement the FCA describes.
Then consider the protections, in this order of value:
- Take more at completion, even at a discount. Every pound moved forward removes this risk entirely.
- Get a parent guarantee from the entity that actually holds the assets, if the payer does not.
- Ask for security, a charge or an escrow arrangement over part of the deferred amount. Frequently refused, occasionally granted, and worth asking.
- Get information rights for the deferred period, so a deterioration is something you learn about rather than discover.
The regulatory point that cuts both ways
The FCA is equally clear elsewhere that the client bank is the firm's asset, that firms must hold adequate financial resources for potential redress, and that it will act where client banks are sold with redress liabilities left behind.
That is directed at sellers as much as at buyers. A structure that moves the clients out and leaves the liabilities in a company with no resources is precisely what the FCA says it will act on, and the fact that a buyer proposed it is not a defence. If a proposed structure looks like it achieves that, take advice before agreeing to it and not afterwards. Liability for past advice covers the seller's side.
The summary
Ask how your buyer is funded, ask what your deferred payment ranks behind, and move as much of the price to completion as you can. A strong offer from a group under financial pressure can be worth materially less than a slightly lower offer paid in full on the day, and the difference between those two will not show up anywhere in the headline multiple.
Comparing a certain offer with a larger uncertain one
This is the decision the funding question actually feeds into, and it is worth doing arithmetically rather than by instinct.
Start from the range your firm sits in. This site's free IFA valuation calculator produces that range from your recurring income, and the range matters more than a point estimate here because you are about to compare two structures rather than two numbers.
Then express each offer as three figures: the amount paid at completion, the amount paid at completion net of the tax due on the whole gain, and the total if every deferred element pays in full.
Now apply a discount to the deferred parts that reflects two separate risks, because they are genuinely separate and sellers tend to collapse them into one. The first is performance risk: will the targets be met? The second is credit risk: if the targets are met, will the payer be able to pay? The funding question is entirely about the second, and it is the one nobody asks.
An offer that is higher on paper, with a large deferred element, from a group whose regulated subsidiaries are upstreaming cash to service external debt, carries both risks at once. An offer that is lower, paid mostly at completion, carries neither. Written out in three lines, the comparison is frequently much closer than the headline suggests, and sometimes reverses.
What this does not mean
It does not mean that a lower offer is automatically safer, or that debt in a capital structure is a warning sign. Debt is ordinary. Businesses are bought with it routinely and repaid without incident, and the FCA's finding was that consolidation can support efficiency and sustainable growth, with poorly managed integration as the risk rather than acquisition itself.
Nor does it mean you should attempt to assess a buyer's balance sheet yourself. You are not going to out-analyse their lenders, and trying is a poor use of the time you have.
What it means is narrower and more useful. Ask the question. Establish who is actually paying you, what your claim ranks behind, and what happens to your money if the group has a difficult year. Then price the answer into how much of the consideration you are willing to leave outstanding.
Most sellers spend their negotiating effort on the multiple and accept the payment structure as given. The structure is where the risk lives, the funding question is what tells you how much risk that is, and both are far easier to change before heads of terms than after.
Read next: who is buying UK advice firms, what the FCA's consolidation review means for sellers, and the rest of the market pillar.