Every sale of an advice firm follows roughly the same information sequence, whatever the buyer and whatever the structure. First a handful of headline numbers, then a layer of detail that supports an offer, then the full contents of your filing cabinet. Buyers do not ask for everything at once, and the order in which they ask is not arbitrary. Each stage has a job to do, and understanding that job tells you what to prepare, how deep to go, and what a fast, clean answer signals to the person on the other side of the table.
This article walks through the three stages in the order a buyer works through them, and sits alongside the rest of the getting-sale-ready material on this site. If you have read the 24-month plan, this is the demand side of the same picture: the plan tells you what to fix, this tells you who will check, and when.
Stage one: the teaser numbers
The first conversation, whether it happens through a broker, a direct approach or an introduction, runs on four numbers. Funds under management, recurring revenue, client count and adviser count. That is the teaser. A buyer can hold those four figures in their head, compare them against the last ten firms they looked at, and decide within minutes whether the conversation is worth continuing.
Each number is doing a specific job. FUM tells the buyer the scale of the asset. Recurring revenue tells them what the asset produces, and it is the figure most conventional valuations are built on: as background, Gunner & Co reported the average recurring-income multiple reaching 4.2x in the first half of 2025, the highest since 2018, which is exactly why recurring income leads the conversation rather than turnover. Client count, read against FUM, gives an average portfolio size and a first hint at servicing economics. Adviser count tells the buyer how much of the revenue walks about on two legs, and how much integration work is coming.
Notice what is not in the teaser. No profit figure, no age profile, no platform list, no compliance history. The teaser is deliberately shallow because its only purpose is to sort firms into "worth a meeting" and "not for us". A seller who volunteers forty pages at this stage is not being helpful; they are showing they do not know how the process works, and they are handing over sensitive detail before any confidentiality undertaking justifies it.
What preparation signals here is simple: the four numbers should be current, consistent with each other, and the same every time you state them. Recurring revenue that shifts between conversations, or a client count that does not reconcile with your back-office system, plants the first seed of doubt before an offer has even been discussed.
Stage two: the detail behind an offer
If the teaser lands, the buyer needs enough to price the firm. This is where the questions get specific, and where the difference between a prepared seller and an unprepared one first shows up in the number offered.
The offer-stage request usually covers revenue broken down by client cohort, the age profile of the client bank, the platforms and providers the assets sit on, the fee basis by segment, and how revenue splits between ongoing advice charges and transactional or initial work. The buyer is no longer asking "how big is it?"; they are asking "how durable is it, and how much of it will still be here in five years?"
Cohort analysis matters because a single recurring-revenue figure hides everything a buyer actually cares about. Two firms with identical recurring income can deserve very different prices if one earns it from three hundred accumulation-stage clients on a platform the buyer already uses, and the other earns it from ninety decumulating clients in their late seventies on legacy products. The age profile question is blunt for the same reason, and it is covered at length in why client age is the number most owners overlook: revenue attached to older clients has a shorter expected life, and buyers price expected life, not this year's income.
Platform concentration is the other quiet pricing question at this stage. A book spread across two modern platforms transfers cleanly. A book scattered across eight providers, some of it in legacy contracts that cannot be moved without advice, is an integration project, and integration projects come off the price. The buyer will also want to understand your fee basis: percentage of assets, fixed fees, or a mixture, and whether your charging has been consistent or renegotiated piecemeal over the years.
The signal sent by preparation at this stage is worth spelling out. A seller who can produce a clean cohort breakdown within days is telling the buyer three things at once. First, the firm's data is in good order, which lowers the perceived risk of everything else. Second, the owner understands their own business the way a buyer does, which makes negotiation quicker and more rational. Third, there is unlikely to be a nasty surprise in diligence, because the seller has plainly looked at their own numbers before showing them. All three of those push in the same direction: a firmer offer, with fewer protective discounts and less of the price pushed into earn-out or deferred consideration. The connection between record quality and price is direct enough that it has an article of its own.
The reverse signal is just as strong. If the age profile takes six weeks to assemble, the buyer does not conclude that you are busy. They conclude the data may not support the teaser numbers, and they price accordingly, or they widen the warranties they will later ask you to give.
Stage three: diligence depth
An accepted offer, usually recorded in heads of terms, opens the third stage. Due diligence is not a repeat of stage two in more detail; it is a different exercise. The offer stage asked what the firm is worth. Diligence asks what the buyer is actually acquiring, and what liabilities travel with it.
The request list now reaches into everything. Client files, and in particular the suitability records behind ongoing advice charges. The complaints register, however short, together with anything referred to the Financial Ombudsman Service and how each item resolved. Client agreements and terms of business, because the buyer's lawyers need to know whether relationships can transfer by novation or need fresh consents. Staff contracts, notice periods and any restrictive covenants. Professional indemnity insurance history, claims record and the position on run-off cover. Regulatory correspondence, past business reviews, and the firm's own compliance monitoring output. If the firm is directly authorised the buyer examines its regulatory history as a standalone entity; if it operates as an appointed representative, attention shifts to the network relationship, the terms of the AR agreement and what consent the principal's exit process requires.
The compliance file deserves particular attention because the regulator has been explicit about what it expects around these transactions. The FCA's published expectations of firms selling client banks make two points every seller should internalise before diligence starts: the client bank is treated as the firm's asset, so a buyer will want clear evidence of ownership, and the FCA has said it will act where client banks are sold with redress liabilities left behind. A buyer's diligence team reads that guidance too. It is a large part of why suitability files, complaints history and PI cover get the scrutiny they do: the buyer is working out where past-advice liability will sit after completion, and what warranties and indemnities they need if it sits anywhere near them.
Structure changes the emphasis rather than the list. In a share sale the company comes with its entire history, so the liability review is at its deepest. In an asset sale, including a structured asset sale to a national acquirer, historic advice liability generally stays with the selling entity, so the diligence weight shifts towards the transferability of clients and revenue, and towards your run-off arrangements. The trade-offs between the two routes are set out in asset sale or share sale; the point here is narrower: know which exercise you are preparing for, because the file a share-sale buyer opens first is not the one an asset-sale buyer opens first.
Why does this depth arrive only now? Because diligence is expensive, for both sides, and no rational buyer spends that money before price and structure are agreed in outline. But the timing creates the seller's biggest hazard. By this stage you are months in, the offer is on the table, and every unanswered question or missing file gives the buyer grounds to renegotiate downwards, extend the earn-out, harden the warranties, or walk away. Deals rarely collapse at the teaser stage; they collapse in diligence, and usually over things the seller could have fixed a year earlier. The patterns are set out in why deals collapse, and a working list of what a buyer's team will actually request lives in the diligence checklist tool, which you can run against your own records long before anyone asks.
Why the order matters to you
Read the sequence from the buyer's side and it is a funnel: each stage spends a little more money and trust, and each stage exists to justify the next. Read it from your side and it is a preparation schedule in reverse.
The diligence file takes the longest to assemble, so it is the thing to start first, even though it is asked for last. Tidying suitability records, chasing missing client agreements, resolving the stragglers on the complaints register: this is measured in months, not weeks. The offer-stage cohort and age analysis is quicker, but only if your back-office data is clean enough to produce it, which loops back to the same records work. The teaser numbers take an afternoon, provided everything beneath them reconciles.
There is one more reason the order matters. Each stage is also a test of the stage before it. The offer detail either confirms the teaser or quietly contradicts it; diligence either confirms the offer pack or gives the buyer a reason to reopen the price. A firm whose numbers hold steady from first conversation to completion keeps its negotiating position intact all the way through. A firm whose numbers erode at each stage trains the buyer to discount everything it says.
None of this requires you to be in the market. Preparing the answers before anyone asks the questions is the cheapest work in the whole process, and it pays whether you sell next year or in five. If you want a number of your own to test the teaser conversation against, the free IFA valuation calculator gives you a range and explains the factors affecting it.