The last few decades have seen substantial growth throughout the investment advisory industry. Mergers and acquisitions are occurring with increasing frequency, and many brokers are identifying opportunities to break away and establish their own independent businesses. Any time that a business launches, acquires, or onboards a new team or otherwise changes shape, it’s essential to keep regulatory compliance considerations in mind to set your company up for success while avoiding potential issues later on. During periods of growth and expansion, businesses tend to be more vulnerable to regulatory compliance risks—especially as their attention is already divided among so many important matters. It’s easy to overlook compliance obligations as your business operations expand, leaving you susceptible to complications in the future.
At Jacko Law Group, PC, we have extensive experience in supporting businesses across multiple industries as they break away to form a new firm or navigate the mergers and acquisitions process. Our goal is to partner with you to formulate a plan that establishes a clear and effective compliance risk management strategy to ensure a seamless transition. Working closely with a highly skilled and knowledgeable business M&A attorney can give you the confidence you need during your business evolutions.
When Advisers Break Away to Form a New Firm
The process of forming any new business tends to be more nuanced than many people initially anticipate. There are so many elements to consider and decisions to make to ensure the success of your endeavor. From a regulatory standpoint, there are several matters that need to be addressed to ease the transition and remain in compliance during this shift. Below is a brief overview of the risk management steps your business can take that allow for a smooth and effective business transition process.
Formulate a Strategic Business Plan
Every successful action begins with a clear and detailed plan. By taking the time to create a strategic plan, you can articulate your vision and establish actionable items to guide your formation process. You can address several topics in your strategic business plan, such as your business goals and objectives, your marketing strategy to attract new clients, the management and organizational structure of the business, budget considerations, and any other matters that will affect the growth of your business.
Partner With Strategic Business Advisors
The sooner you retain legal counsel, the more time you will have to give your business the solid foundation it deserves. Your experienced business M&A attorney can help you identify and review your goals to determine the specific steps that will need to be taken in the short and long term. Moreover, you can rely on this ongoing professional relationship to provide you with counsel as needed.
Address Compliance Policies and Risk Assessment Strategies
If you are hiring a team of brokers, you will need to work with your business M&A attorney to ensure that all employment and independent contractor agreements are clearly worded and sufficiently protect the best interests of you and your business. For instance, review key areas of these contracts, like confidentiality, trade secret, non-compete, and non-solicitation covenants, to ensure that they protect your interests and minimize legal risks. You will also need to conduct background and compliance checks on any new professionals you hire to make sure that they reflect the values of your firm and will not threaten its reputation. Creating client disclosure documents, preparing client agreements, conferring with insurers, and assessing all compliance and operational requirements are just a few of the additional steps you should take before you launch your new firm, and your business and M&A counsel will assist you in this important stage.
Due Diligence During Mergers and Acquisitions
Whether you are selling or buying a business, both parties should approach the due diligence stage with care and attention to ensure a smooth transition. Growth introduces more variables (i.e., new markets, employees, contracts, data, etc.), which increases exposure to potential compliance risks. Read on to learn more about how to manage risks during a merger, acquisition, or period of significant business growth.
Retain Legal Counsel That Specializes in Mergers and Acquisitions
When it comes to the success of your business, you deserve the best legal counsel out there. Hiring an experienced business M&A attorney who understands the complexities of mergers and acquisitions is the first step to making sure the process is successful. The right lawyer will be able to assist you with negotiations, avoid common mistakes and closing delays, and answer every question as they arise.
Mitigate Transition Risks
Depending on the jurisdiction and governing contracts that affect the merger or acquisition, the rules and regulations can vary considerably and be especially nuanced and confusing to grasp. That’s why partnering with a highly experienced business M&A lawyer is one of the best steps you can take to avoid making serious mistakes or overlooking critical details during this transitional time. Your attorney can help you with any number of tasks, such as negotiating new contracts, timing any resignations or onboarding actions appropriately, maintaining confidentiality protections, and helping you navigate any disputes or issues that may arise along the way.
Whether you are about to venture off to form an independent business or contemplating a merger or acquisition, the dedicated and highly experienced legal team at Jacko Law Group, PC, are ready to provide you with the clear and effective guidance you need to proceed with confidence. Reach out to our M&A attorneys today at (619) 298-2880 to get started.
