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ARTICLE · 31 JANUARY 2025

Protecting Your Proceeds – Mitigating The Risks Posed By Past-advice Claims When Selling Your IFA Business

Herrington Carmichael LLP
Herrington Carmichael LLP
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Herrington Carmichael LLP

Herrington Carmichael LLP

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It has become increasingly more typical for IFA sellers to provide a wide suite of warranties and indemnities covering past advice claims, particularly where a business...

United KingdomInsurance
Harry Winkley
Harry Winkley
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It has become increasingly more typical for IFA sellers to provide a wide suite of warranties and indemnities covering past advice claims, particularly where a business has a complicated or wide-ranging book of past advice (i.e. DBT transfers, VCTs, unregulated collective investment schemes).

Whilst this is more relevant to share sales (i.e. where the liabilities of the target company transfer with the target company), indemnities and warranties relating to past advice are still an ever-present part of business disposals that are structured as an asset sale.

Nevertheless, there are a number of protections that sellers can look to include in their sale to control the risk of past advice claims and mitigate the potential clawback against their proceeds.

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