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Buying books of business

Matt Pais

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Poirier develops a web- and phone-based practice to accommodate his more than 3,000 clients.
Pierre Arsenault Photography

It’s not unusual for advisors to buy books of business from other advisors.

It’s less common, however, for an advisor to average at least one business purchase per year.

Yet Alain Poirier has been in the financial services profession for 12 years and as we speak is working on his 12th and 13th business acquisitions.

“When I started out, I was finding it pretty hard to get clients, so I bought my first book and it went well,” said the four-year MDRT member from Saint-Lambert, Quebec, Canada. “Then I bought the second one, and it was bigger and better, and I kept going from there.”

If that seems like more clients than Poirier could handle, it is (almost 3,500 to date). But his business is set up to manage the quantity: Not only does he have five advisors and three administrative staff to lessen the load, but clients are served almost entirely on the phone and internet.

That does not mean Poirier can shrug off the transition process. He knows the importance of keeping the advisor he has purchased the practice from involved for a few years while he establishes relationships with the new clients. With that in mind, Poirier brings along the previous advisor for the first few meetings he has with clients.

Plus, select new clients are invited to events at the office or to outings with their families, during which Poirier or his staff can establish a connection. With so many people to serve, smaller clients are contacted but not invited to events.

“It’s pretty easy to manage now that computers do everything for us,” Poirier said, noting that his website can handle appointments and administrative staff can answer most questions. Occasional client meetings take place in the office, not at clients’ houses or places of business.

That raises the question of who these clients are, and if any of these transitions have failed.

Poirier targets practices with at least 20% corporate clients and, as long as it is not a particularly small book, ensures the previous advisor is willing to stay on for the transition. When he initially bought businesses without keeping the advisor on, he found that he lost 10% of the clients; when the previous advisor stayed, only 2% were lost.

Still, even if the price is right, deals and client onboarding can go wrong.

One business acquisition involved Poirier paying the full price up front only to have the other advisor turn around and transfer half of the clients back to his name. The case has been in court for more than a year and a half with no end in sight.

“I learned that the money needs to be kept in a trust and paid on a two-to-three-year schedule so that can’t happen,” Poirier said. “Establish really good contracts with a lawyer to protect yourself.”

It’s pretty easy to manage now that computers do everything for us.

In addition, there have been a few times when newly acquired clients prefer the previous service they received over Poirier’s de-emphasis of in-person meetings. That said, if the client wants that and lives close enough to the office, Poirier strives to make it work. If they live too far away, Poirier finds them a different advisor, periodically exchanging clients this way with advisor friends in similar situations.

Convenience, efficiency and technology are a big part of what makes Poirier’s practice thrive. For six months, he has purchased Google ads so his practice will be one of the first results when someone in the area searches for something like “life insurance for doctors.” For the first three months, Poirier lost his full $6,000 investment; by now the increased presence is bringing in $8,000 monthly, or a $2,000 profit.

“We initially started doing publicity on TV, but it didn’t work,” Poirier said. “When someone’s looking for something, they’re looking on the internet.”

Soon Poirier will go beyond an online relationship. He is working on creating an app where applications can be filled out, and that can function as a way for clients to create referrals on their phone that automatically send the person’s name, number and email address to Poirier. Part of the reason is that many people currently struggle to keep track of physical business cards.

“When people give me cards,” Poirier said, “I take a picture so I don’t lose them.”

Contact: Alain Poirier apoirier@inveska.ca

 

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