Glossary

Every term you will meet in a sale, each explained in one clear paragraph, in plain English.

Adviser charging: Adviser charging is the system under which a firm agrees its fees directly with the client rather than taking commission from a product provider. It came in with the Retail Distribution Review at the end of 2012, and it means charges are set out and agreed in advance, then taken either directly or from the client's investment. When you sell, what matters is that your charging is documented and reasonably consistent across the client bank. A buyer will test whether the same income can be produced under their own charging structure, and any clients paying on terms the buyer cannot replicate become a question mark on price.
Appointed representative: An appointed representative is a firm that carries on regulated business under the authorisation of another firm, known as its principal. The principal takes regulatory responsibility for what the appointed representative does, which is why it usually has a say in what happens to the business. Selling as an appointed representative is a different exercise from selling a directly authorised firm: what changes hands is normally the client relationships and the income, not an authorisation. Read the principal agreement early, because consent, notice periods and sometimes rights over your book will sit in it.
Asset sale: In an asset sale the buyer buys the trade and assets of your business, meaning the client relationships, the goodwill and the ongoing income, rather than the shares in your company. Your company stays yours, along with its history and its liabilities for past advice. The money lands in the company, so getting it out to you personally takes a further step, usually dividends or a solvent liquidation. Buyers often prefer this structure for precisely the reason sellers often do not: what went before stays behind with you. Compare it with a share sale before you settle the shape of the deal, because the tax outcome and the risk you keep are both very different.
Assets under advice: Assets under advice is the total value of client investments your firm advises on. It is sometimes used interchangeably with funds under management, although assets under advice usually means everything you advise on wherever it is held, including money you do not manage. Buyers use it as a size measure and as a sense check on your income. It is not the number that sets your price, though: income is, and two firms with identical assets can be worth quite different amounts depending on how they charge.
Beauty parade: A beauty parade is meeting several buyers, or several corporate finance advisers, over a short period so you can compare them side by side. For a seller it is the cheapest way to find out what terms are available and how different firms would treat your clients and your staff. It also gives you a reference point before anyone asks for exclusivity. Do it before you commit, not after, because once you are locked into one conversation your comparison has gone.
Book of business (client bank): Your book of business, also called the client bank, is the set of clients your firm advises and the income those relationships generate. Buyers look at its composition rather than just its size: average client value, age profile, how concentrated the income is in a handful of families, how much is ongoing rather than one-off, and how many clients have actually been seen in the past year. A smaller book of engaged, well documented clients often prices better than a larger one with a long tail nobody has spoken to. Cleaning it up is work you can do a year ahead of any sale.
Break fee: A break fee is a payment one side agrees to make if the deal collapses for defined reasons, most often a seller covering a buyer's costs after walking away during exclusivity. It is common on larger transactions and less so on advice practice sales. If one is asked for, cap it at a sensible figure and tie it to a short, specific list of triggers. A break fee that bites when the buyer changes the terms is not a break fee, it is a penalty for objecting.
Business Asset Disposal Relief: Business Asset Disposal Relief is a capital gains tax relief that reduces the rate you pay on qualifying gains when you sell shares in your own trading company. It was formerly called Entrepreneurs Relief. The conditions include being an officer or employee of the company and holding at least 5 per cent of the ordinary share capital and voting rights for a minimum qualifying period. There is a lifetime limit on the gains that qualify, and the rate has been rising in recent Budgets. Confirm the current rate and conditions with your accountant before you model what you would actually keep, because this relief moves more of the net figure than most negotiating points do.
Change in control: Change in control is the regulatory process that applies when someone takes control of, or increases their control of, an FCA authorised firm. Approval has to be obtained before the change happens, and the FCA assesses the proposed controller's suitability and financial soundness. The mechanism is a section 178 notice, and the assessment period runs in working days, so it belongs in your timetable from day one. A share sale triggers it. An asset sale of client relationships may not, although the buying firm still needs the right permissions to service your clients.
Clawback: Clawback is the buyer's right to reduce the price, or recover money already paid, if income falls away or a defined problem appears after completion. Typical triggers are clients leaving within the first year or two, or complaints emerging about past advice. It overlaps with an earn-out but works in the opposite direction, taking money back rather than adding it. Read the drafting closely: a clawback that bites when a client dies, retires or moves abroad is charging you for events nobody controls.
Completion: Completion is the point at which ownership legally transfers and the first money moves. It can be the same day as signing or some weeks later, if conditions such as regulatory approval have to be satisfied first. A good deal of practical work clusters around this date: client communications, staff announcements, systems access, regulatory notifications. Agree the sequence in advance rather than improvising it on the day.
Completion accounts: Completion accounts are a set of accounts prepared shortly after completion to establish the actual cash, debt and working capital in the business on the day, with the price adjusted to match. They give an accurate answer but they also give both sides something to argue about for weeks after everyone has shaken hands. The alternative is a locked box, which fixes the position at an earlier date. Whichever you use, agree the accounting policies in the sale agreement, not afterwards.
Confidentiality agreement: A confidentiality agreement, often called an NDA, is signed before you share anything meaningful about your firm. A useful one does more than say the information is secret: it stops the other side approaching your staff and your clients, limits who inside their business can see what you send, and requires your material to be returned or destroyed if talks end. Sign it before the first detailed conversation, not before the first meeting about the second batch of data. It costs little and it is the only protection you have while a prospective buyer reads your client list.
Consideration: Consideration is the total amount you receive for your business, in whatever form it takes. It is rarely all cash on the day: the usual shape is an initial payment, deferred instalments, sometimes an earn-out, occasionally shares or a loan note. Two offers with the same headline consideration can be worth very different amounts once you allow for timing, conditions and the risk of never receiving the later parts. Value each element separately, then compare what actually lands in your bank account and when.
Consumer Duty: The Consumer Duty is the set of FCA rules requiring firms to deliver good outcomes for retail customers, in force since July 2023. It covers price and value, products and services, consumer understanding and consumer support. In a sale it turns into an evidence question: fair value assessments, records showing that clients paying an ongoing charge actually receive the service they were promised, and management information that shows someone is watching. Buyers examine this closely because they inherit the exposure. A thin file here is a live risk to your price, not a paperwork tidy-up.
Data room: The data room, sometimes called the deal room, is the secure online folder holding everything a buyer's due diligence will ask for: accounts, client income analysis, adviser contracts, compliance records, complaint history, insurance documents, leases. Building it early is probably the single most useful piece of preparation a seller can do. A buyer whose questions are answered before they ask them moves faster and discounts less. A buyer who waits three weeks for a schedule of income by client starts to wonder what else is missing.
Deferred consideration: Deferred consideration is the part of the price paid after completion, usually on fixed dates and sometimes subject to conditions. It differs from an earn-out in that the amount is generally known and depends on time and defined conditions rather than on performance. The questions to ask are what happens if the buyer is itself sold, what happens if the buyer runs short of money, and whether your payments are secured or rank behind the bank. Deferred money you cannot enforce is a hope, not a price.
Defined benefit transfer advice: Defined benefit transfer advice is advice given to clients about moving out of a final salary pension scheme. Because of the complaint and redress history in this area, buyers treat it as one of the highest risk items in due diligence. Some will exclude those clients, some will require specific indemnities, some will hold back a larger share of the price. If your firm has any of this history, gather the files and the insurance position early and be straightforward about it, because it will be found.
Directly authorised: A directly authorised firm holds its own FCA authorisation rather than operating under a principal. It gives you control of your permissions, your compliance arrangements and your commercial relationships. In a sale it means two things: you have something to sell beyond the client relationships, and a sale of your shares triggers the change in control process. Directly authorised firms generally have more structural options at sale than appointed representatives do.
Disclosure letter: The disclosure letter is the document in which you tell the buyer, before signing, anything that makes one of your warranties untrue. Anything properly disclosed cannot then be claimed against you. It is the seller's protection, not an admission of failure, and it is worth the hours it takes to write properly. General disclosures of the everything in the data room type are weaker than specific ones, so name the issue, name the document and be exact.
Due diligence: Due diligence is the buyer's examination of your business across finance, regulation, client files, legal matters and day to day operations. Expect questions on income by client, charging structures, complaint history, your professional indemnity record and claims, adviser employment contracts, past defined benefit transfer advice and the quality of your suitability files. It is intrusive by design and it usually runs for several weeks. The better your data room, the less it hurts and the less it costs you in adviser fees.
Earn-out: An earn-out is the part of the price that depends on what the business achieves after completion, typically retained income or client retention measured over one to three years. Two things decide whether it is fair: how precisely the measure is defined, and who controls the levers that move it. If the buyer moves your clients to a different platform, changes the charging, or reassigns advisers, the outcome is in their hands, not yours. Define the measurement, the reporting you will receive, and what happens if you leave, all in writing before you sign.
EBITDA: EBITDA means earnings before interest, tax, depreciation and amortisation, and is used as a proxy for operating profit. Buyers rarely take your reported figure: they adjust it, adding back an owner salary above the market rate, one-off costs and personal expenses run through the business, then deducting the cost of hiring someone to do what you do. Advice firms trade on a multiple of recurring income or of adjusted EBITDA, and the adjustments are where most of the real negotiation happens. Work out your own adjusted figure before anyone else does, and be able to evidence every add-back.
Escrow: Escrow is money held by a third party, usually solicitors, until an agreed condition is met. It is used to cover potential warranty claims, complaints emerging after the sale, or client retention targets. Because it is your money sitting outside your control, the terms matter more than the amount: how long it is held, what releases it, who decides, and what interest is earned. Ask for a schedule of automatic partial releases rather than a single date at the end.
Exclusivity: Exclusivity, sometimes called a lock-out, is a period during which you agree to deal with one buyer only. Buyers ask for it before they spend real money on due diligence, which is reasonable. Keep it short, put a firm end date on it, and think about what happens if the buyer reduces the price late in the period, when you have no alternative in the room. Exclusivity is the moment your negotiating position is weakest, so agree as much as possible before it starts.
Financial Conduct Authority (FCA): The Financial Conduct Authority is the regulator for financial advice firms in the UK. It grants and varies permissions, approves changes in control, sets the conduct rules including the Consumer Duty, and must be notified of certain events during a sale. Its involvement generally affects your timetable more than your price, but a firm with an untidy regulatory record will feel it in both. Nothing in a sale should be planned on the assumption that regulatory steps are quick.
Financial Ombudsman Service: The Financial Ombudsman Service is the free service that resolves complaints between consumers and financial firms. It can make awards up to a published limit, which is high enough to matter on a single case, and its decisions bind the firm. Buyers examine your complaint history carefully because liability attaches to the advice, not to the ownership of the business. A clean record is worth real money at sale; a pattern of upheld complaints changes the structure of the deal.
Financial Services Compensation Scheme (FSCS): The Financial Services Compensation Scheme pays compensation when an authorised firm fails and cannot meet claims made against it. It is funded by levies on authorised firms, so it is a cost line in your own accounts. It matters to a seller in two ways. First, those levies sit in the profit figure a buyer will assess. Second, a firm that closes without a proper plan leaves its clients relying on the scheme, which is one reason an orderly sale is usually the better outcome for everybody.
Funds under management (FUM): Funds under management is the total value of client money your firm manages or advises on. It drives any charge expressed as a percentage of assets, so it drives most firms' recurring income. It also moves with markets, which is why buyers stress test it: a book valued at the top of a strong year looks different after a correction. Expect a buyer to ask what your income would be on a lower asset base, and have an answer ready.
Goodwill: Goodwill is the value in your business beyond its tangible assets: the client relationships, the reputation, the recurring income and the team. In an asset sale, goodwill is essentially what you are selling. Its tax treatment differs between an asset sale and a share sale, which is one of the reasons structure should be decided with your accountant rather than settled in a meeting. Goodwill that lives entirely in one person's head is worth less than goodwill embedded in a process, a brand and a team, and that difference is something you can change before you sell.
Heads of terms: Heads of terms is the short document setting out the agreed shape of a deal before the lawyers start drafting: price, structure, payment timing, conditions, exclusivity. Most of it is not legally binding, with the usual exceptions of confidentiality, exclusivity and who pays costs. It is still the most important document in the process, because everything afterwards is drafted from it and reopening a point later looks like bad faith. Spend proper time here; a vague heads of terms buys you months of expensive argument.
Indemnity: An indemnity is a promise to reimburse the buyer, pound for pound, for a defined problem, usually one already known about. Typical subjects are a specific complaint, a tax exposure, or a category of past advice. Unlike a warranty claim, the buyer does not have to show the business is worth less, only that the cost has been incurred. Because it is a direct transfer of risk, negotiate caps and time limits on indemnities as hard as you do on warranties.
Information memorandum: An information memorandum is the document describing your business to prospective buyers: history, clients, income, people, systems and your reasons for selling. It sets the terms of the conversation, so accuracy beats promotion. Anything overstated here will be found in due diligence and will cost you more in credibility than it gained you in first impressions. A short, clear, honest document from a well run firm is more persuasive than a long one.
Initial charge: The initial charge is the fee a client pays for initial advice and implementation, as distinct from the ongoing charge. Buyers value it far less highly than recurring income because it does not repeat and it depends on continued new business. A firm whose profit relies heavily on initial charges is effectively selling a sales operation rather than an income stream, and it prices accordingly. Where your initial income comes from existing clients rather than new ones, say so, because that is a different and better story.
Integration: Integration is the work of moving your clients, your staff and your systems into the buyer's business after completion. It is where most of the value in a practice sale is won or lost, and it is usually under-planned by both sides. If any part of your price depends on retention, integration quality is your commercial interest as much as the buyer's, so ask how they have done it before and how many clients stayed. Ask to speak to someone who sold to them two years ago.
Key person dependency: Key person dependency is the extent to which client relationships and income rely on one individual, usually the owner. High dependency lowers the price and pushes more of it into deferred payments and earn-outs, because the buyer is carrying the risk that clients follow the person rather than the firm. Introducing a second adviser to your clients well before a sale is one of the few reliable ways to improve terms. It takes a year or two to do properly, which is why the preparation has to start before the decision to sell feels urgent.
Lifetime limit: The lifetime limit is the cap on the total gains that can benefit from Business Asset Disposal Relief across your lifetime. It applies to you, not to each transaction, so relief used on an earlier sale is no longer available. The limit has been reduced significantly since the relief was introduced. Check with your accountant what remains available to you before assuming a headline tax rate on your proceeds.
Locked box: A locked box is a pricing mechanism that fixes the balance sheet at a date before completion, with the buyer taking the economic risk and reward of the business from that date onwards. It avoids completion accounts and therefore avoids arguments after the money has moved, which sellers usually like. The trade is that you cannot take value out of the business between the locked box date and completion except for items specifically permitted in the agreement. Agree the permitted leakage list carefully, particularly if you normally take dividends.
Marren v Ingles: Marren v Ingles is the 1980 House of Lords case which established that a right to receive future, unascertainable payments is itself an asset for capital gains tax purposes. In practice it means that when you agree an earn-out of uncertain value, HMRC puts a value on that right at completion and taxes you then, with a further calculation when the payments actually arrive. It can produce a tax bill on money you have not received and may never receive. This is the reason earn-out structures are designed with tax advice in the room, not reviewed by an accountant afterwards.
Members voluntary liquidation (MVL): A members voluntary liquidation is a solvent liquidation, used after an asset sale to distribute the money left in the company to shareholders as capital rather than as income. It can be considerably more efficient than paying the same amount out as dividends, and Business Asset Disposal Relief may be available on the distribution. There are anti-avoidance rules that can undo the benefit if you carry on a similar business shortly afterwards, so it does not sit comfortably with plans to keep advising a few clients. Take advice on this before you choose an asset sale, not after.
Multiple: A multiple is the figure applied to a chosen measure, usually recurring income or adjusted EBITDA, to arrive at a price. Multiples quoted in conversation are almost always headline figures applied to the total consideration, including deferred and earn-out elements that may never be paid in full. That makes them a poor basis for comparing offers. Ask three questions every time a multiple is mentioned: applied to what measure, what proportion is paid at completion, and what conditions attach to the rest.
Network: A network is a principal firm that provides authorisation, compliance and support services to appointed representatives. If you operate within one, your network agreement is a central document in any sale: it may set notice periods, restrict who you can talk to, and in some cases give the network rights over your client book. Read it before you approach anyone. Networks vary widely in how they treat member firms who want to sell, and finding out late is expensive.
Non-compete (restrictive covenant): A non-compete, one of a set of restrictive covenants, is your promise not to compete, approach former clients or poach staff for a defined period after the sale. Buyers insist on them because they are buying relationships, and the courts will enforce them where the scope and duration are reasonable. Think carefully about what you want to do afterwards before you agree the wording: helping a family member with their investments, taking a consultancy role, or advising in a different sector can all fall foul of covenants drafted too widely. Negotiate the boundaries while your bargaining position is still strong, which means before signing.
Novation: Novation is the legal transfer of a contract from one party to another with the other side's agreement, so the buyer steps into your client agreements. In an advice sale, client consent is the heart of the matter: you are not simply assigning a stream of income, you are moving a relationship that the client has to agree to move. The method used, whether clients must actively opt in or are treated as consenting unless they object, has a large effect on how much income survives the transfer. Agree the communication plan and the wording before completion, because a poorly written letter to clients can cost more than any clause in the contract.
Ongoing charge: The ongoing charge is the recurring fee a client pays for continuing service, usually a percentage of the assets advised on, sometimes a fixed amount. It is the engine of a practice's value, because it is the income a buyer can reasonably expect to still be there next year. Buyers test not just the amount but whether the service being paid for is genuinely delivered and evidenced, since the Consumer Duty requires exactly that. Ongoing charges attached to clients nobody has met for three years are a liability dressed as an asset.
Part 4A permission: Part 4A permission is the specific list of regulated activities your firm is authorised to carry on, granted under the Financial Services and Markets Act. It matters at sale because a buyer must hold the permissions needed to service your clients. Where they do not, either the shape of the deal changes or they apply to vary their permission first, which adds months. Check the match early rather than assuming any authorised firm can take on any book.
Platform: A platform is the technology service that holds and administers client investments. Where your clients sit can make a transfer simpler or considerably harder, depending on what the buyer already uses. Moving clients to a different platform after the sale is an advice exercise with its own suitability requirements and cost, and it can be slow. Because that cost lands on the buyer, it affects what they will pay, and because it disrupts clients, it affects retention and therefore any earn-out of yours.
Professional indemnity insurance (PII): Professional indemnity insurance covers claims arising from the advice your firm has given. Two aspects matter in a sale. The first is your claims history, which buyers examine closely and which shapes their view of the risk they are taking on. The second is what happens to cover after you stop trading, which is dealt with by run-off cover and is a real cost you should build into your net proceeds. Get your broker involved early, because the run-off quote can be a surprise.
Prudential consolidation: Prudential consolidation is where a group owning several regulated firms has its capital requirements assessed across the group rather than firm by firm. It is a regulator's tool for looking at overall financial resilience rather than one entity at a time. For a seller it is mostly background, but it does explain some buyer behaviour: a group facing consolidated capital requirements has a reason to spread payments over time rather than pay everything at completion.
Recurring income: Recurring income is the income that repeats without new advice being sold, principally ongoing charges and legacy trail. It is the main driver of what your firm is worth. Buyers look past the headline figure at how durable it is: the age profile of the clients paying it, the rate at which they are drawing down and eventually leaving, how much sits with a few large families, and whether the charges are contractual or could be switched off by the client tomorrow. Two books with the same recurring income can be worth quite different amounts on those measures alone.
Redress: Redress is compensation paid to a client who has suffered loss because of unsuitable advice. Past redress, and any pattern in it, is a focus of due diligence. In a share sale the liability for past advice travels with the company, which is why buyers ask for indemnities or prefer to buy assets instead. Being upfront about anything in this area is better than having it discovered: found problems cost price, disclosed problems cost paperwork.
Regulatory capital: Regulatory capital is the minimum level of financial resources the FCA requires an authorised firm to hold. It affects how much cash you can take out of the business before completion and how any locked box or completion accounts adjustment is calculated. A firm running close to its requirement has less room to distribute profits in the run up to a sale. Know your number and keep clear headroom, because breaching it during a transaction is exactly the wrong moment.
Retention: Retention is the proportion of clients, or of client income, still with the buyer after a defined period. It is usually the measure that decides whether an earn-out pays out. Because so much money turns on it, the definition has to be precise: measured by client or by income, gross or net of market movement, and what happens when a client dies, retires, moves abroad or is asked to move platform by the buyer. Insist on regular reporting during the earn-out period so you are not seeing the number for the first time when it decides your payment.
Run-off cover: Run-off cover is professional indemnity insurance that covers claims made after your firm stops trading about advice given while it traded. It is normally needed for several years and it is a genuine cost, frequently left out of the mental arithmetic on net proceeds. On a share sale the company continues and the buyer inherits the position. On an asset sale the history stays with you, so the run-off premium is your bill and should be quoted before you decide between the two structures.
Sale and purchase agreement (SPA): The sale and purchase agreement is the main contract: price, structure, payment timing, warranties, indemnities, restrictive covenants and conditions. Everything shaken hands on in the heads of terms becomes enforceable wording here, and everything not written down disappears. For a seller, the clauses that matter most are usually the ones governing when and whether you get paid, and the limits on your liability for warranty claims. Read those two sections yourself, however good your solicitor is.
Section 178 notice: A section 178 notice is the formal notification to the FCA that someone intends to acquire or increase control of an authorised firm. The regulator then has a defined assessment period, which can be paused if it asks for information that is not immediately available. Incomplete submissions are the usual cause of delay, so it pays to prepare the supporting material properly. Treat it as a real workstream in the timetable rather than an administrative formality at the end.
Senior Managers and Certification Regime (SM&CR): The Senior Managers and Certification Regime is the framework that allocates personal responsibility to named individuals inside a regulated firm. In a sale, senior manager responsibilities have to be reallocated, approvals may be needed for new individuals, and your own position as an approved person has to be handled properly whether you are staying or leaving. Handovers of responsibility are documented, so leave time for them. Getting this wrong is a compliance problem rather than a commercial one, but it can still hold up completion.
Share sale: In a share sale the buyer buys the shares in your company, taking the whole company with them, including its trading history and its liabilities. It is usually the more tax efficient route for the seller, because the money goes to shareholders directly and Business Asset Disposal Relief may apply. The trade is that the buyer inherits your past advice, so they will want extensive warranties, indemnities and thorough file due diligence. It also triggers the change in control process, which lengthens the timetable.
SUP 15 notification: SUP 15 is the chapter of the FCA Handbook setting out what a firm must tell the regulator and when. It covers significant events, certain breaches and various changes to a firm's business, and a sale process typically generates several notifiable items. Failing to notify is itself a breach, and it is an avoidable one. Agree with your compliance support at the start of the process which notifications will be needed and who is responsible for making them.
Threshold conditions: Threshold conditions are the minimum standards a firm must meet at all times to remain authorised, covering appropriate resources, suitable management and effective supervision. They are the baseline rather than a target. Buyers assess whether your firm has been meeting them comfortably, because any doubt shows up both in due diligence and in how the FCA views the transaction. A firm that has been running thin on resources or supervision will find that surfacing at the least convenient moment.
TUPE: TUPE is the set of regulations protecting employees when a business, or part of one, changes hands. Staff transfer to the buyer on their existing terms and conditions, and both sides have duties to inform and consult employee representatives before the transfer happens. It applies to most asset sales. On a share sale the employing company does not change, so TUPE is not triggered, although the practical questions about your team are much the same. Plan the staff conversation properly: your people will hear about the sale eventually, and hearing it first from you is worth a great deal.
Unascertainable consideration: Unascertainable consideration is a future payment whose amount cannot be worked out at completion, typically an earn-out based on future performance. HMRC treats the right to receive it as a separate asset with a value at completion, following Marren v Ingles, which can create a tax charge before any cash arrives. Structuring the payments with a fixed ceiling, or as fixed instalments, can change the treatment. This is one of the few points in a sale where the drafting decides the tax rather than the other way round, so take advice before agreeing the structure.
Vendor loan: A vendor loan is where you leave part of the price outstanding as a loan to the buyer, repaid over time with interest. It makes you a creditor of the buyer's business, which puts you in a queue if things go wrong. Ask where you rank against their bank, what security you have, and what happens if the buyer is itself sold or takes on more debt. An interest rate that looks generous is no substitute for being able to enforce repayment.
Vertical integration: Vertical integration is where one group owns the advice business, the investment management and sometimes the platform as well, so it earns at more than one point in the chain. It affects what a buyer can pay: a firm that will also earn from managing your clients' money can justify more for the advice relationships than one that will not. It also affects what happens to your clients afterwards, since their investments may be moved into the group's own solutions. If your price depends on retention, ask exactly what is planned for client portfolios and when.
Warranty: Warranties are statements of fact about your business that you give in the sale agreement: that the accounts are accurate, that there are no undisclosed complaints, that you own what you say you own. If one turns out to be untrue and the buyer suffers loss as a result, they can claim damages. Your protections are a cap on total liability, time limits for bringing claims, a minimum threshold below which no claim can be made, and above all a thorough disclosure letter. Negotiate all four; they matter more to your outcome than the last small movement on price.
Warranty and indemnity insurance: Warranty and indemnity insurance is a policy that covers warranty claims, so the buyer claims against an insurer rather than against you. It has been common on larger transactions for years and is becoming available on smaller ones. Where it works, it can reduce the amount held back in escrow and get more of the price into your hands at completion. The premium is a deal cost, and who pays it is a point to settle in the heads of terms.
Wealth manager: A wealth manager is a firm that combines financial planning with investment management. The term is used loosely across the market and tells you less than it appears to. Where a buyer describes itself this way, ask which part of your income they actually value and what they intend to do with your clients' portfolios. A firm that will earn from managing the money may pay more for the relationships, but the client experience after the sale will look different, and that is worth understanding before you sign.
Working capital adjustment: A working capital adjustment is the mechanism that adjusts the price so the business is handed over with a normal level of working capital in it. It sounds like an accounting technicality and it moves real money, sometimes a substantial amount. The argument is almost always about what counts as normal, so define the target level, the components and the calculation method in the heads of terms rather than leaving it to the accountants afterwards. If the deal uses a locked box instead, this adjustment usually disappears, replaced by rules about what you may take out before completion.