Care Lending Group helps buyers step in as succession planning drives a wave of M&A activity
This article was produced in partnership with Care Lending Group
As more financial advisors approach retirement age, the question of how and when to transition their practice is becoming increasingly urgent.
“There’s an aging population in the advisory industry…Folks are looking to retire and maximise the value of the business that they’ve built and the legacy that they’ve created” says Tyler Wilson, Director of Advisor Finance at Care Lending Group, a Canadian financing company that provides tailored lending solutions to financial advisors, among other sectors.”
It’s a simple observation, but one with growing implications. Across the country, more independent financial advisors are beginning to think seriously about succession—whether that means selling their book outright, gradually stepping back, or joining forces with a larger firm. Mergers and acquisitions in the space have picked up accordingly, and Wilson sees a clear throughline.
“A lot of the M&A we see is junior partners or associates purchasing the book from a retiring advisor [they currently work with],” he explains. “Some are going into full retirement, others are phasing out gradually. There are also some larger mergers where firms are achieving scale via acquiring books.”
For Care Lending Group, these trends are driving demand for thoughtful deal structures, succession planning, and acquisition financing that fits the needs of both sellers and buyers.
Why timing matters more than you think
The decision to sell a book of business isn’t just about when an advisor is ready to retire, it’s also about ensuring (or structuring) a smooth transition — otherwise, the value of the business typically takes a hit.
There’s a higher risk of client attrition if the book is sold quickly, so a proper transition plan is paramount in these transactions. Wilson says those who plan early are typically better off. Phased exits are one way to manage that risk. Advisors may reduce their hours, shift certain responsibilities, or focus on one area of the business, such as insurance, while passing the rest to a successor.
“Transferring the goodwill, transferring the relationships takes time,” he explains. “Understanding how that advisor operated and how they built those relationships really helps with maintaining continuity of care for clients going forward”
What scale really delivers and what it doesn’t
Acquiring a book of business isn’t only about retirement succession planning. For some advisors and firms, it’s a strategy to increase efficiency and improve earnings. When infrastructure like staffing, compliance, and real estate is already in place, taking on a second or third book can be relatively efficient.
“If a business already has the foundation, they can take on more volume without a big jump in fixed costs,” Wilson says. “In some cases, they may even move up a grid or earnings tier after the acquisition.”
He adds that client expectations are beginning to shift as well. Some firms are positioning themselves as full-service hubs, combining planning, investments, tax, and insurance under one roof.
“We’ve noticed overall service actually improves with some consolidation,” Wilson notes. “It depends on the firm, but clients do seem to value the one-stop model when it’s done right.”
How Care Lending supports these deals
As more practices come up for sale, other advisors are stepping up -- but many face a familiar roadblock: access to capital. That’s where Care Lending Group comes in.
“We’re commercial lenders. We come in and finance the acquisition of the book of business,” Wilson says. “Not everybody buys a book of business every day. We see a lot of these transactions, so we’re able to support more than just the financing by acting as a partner in supporting growth.”
The company evaluates each deal based on the structure, cash flow, and transition plan. In many cases, Care Lending can finance up to 100 percent of the acquisition price.
“We look at how they’re going to run the book post-close, and how they plan to retain the goodwill,” says Wilson. “We also look at the combined revenue, expenses, and cash flow to understand what’s feasible.”
Successful acquisitions as “succession cliff” looms
Canada’s advisory industry is heading toward what some call a “succession cliff,” and Wilson finds shifts supporting the theory. More books of business are becoming available, and there’s a sub-set of early- to mid-career advisors that are stepping up to acquire them and roll them into their existing book of business.
To keep pace with the growing number, size, and complexity of transactions, Care Lending is staying flexible. “We try to be nimble,” Wilson says. “Every case is different. We spend time understanding what the advisor is trying to do and how we can support that, whether it’s a one-time deal or a broader growth plan.”
Whether you’re planning a succession or scaling through acquisition, Wilson says there are three critical elements that consistently lead to success:
- Start early with a transition plan: Deals tend to go smoother -- and retain more client value when they’re planned well in advance. A phased transition gives both parties time to build trust and ensure continuity.
- Understand the economics post-close: It’s not just about the purchase price. Buyers need to model cash flow, staffing needs, and client servicing capacity to ensure the acquired book is accretive.
- The right kind of financing partner: Deals can stall without access to capital. Having a lender that understands the structure of advisory businesses -- and can assess more than just the numbers -- can make the difference between a deal that works and one that doesn’t. The more continuity in client experience, the better the retention and long-term value.
As transitions become more common and more complex, it’s clear that advisors who act early, plan carefully, and find the right partners - financial or otherwise - are more likely to achieve the outcomes they want.
