Learn More About Due-Dilligence Reviews

Corporate Finance Advisors performs thorough, objective reviews of prospective deals, with an emphasis on identifying risks that might lead to economic losses or managerial headaches after the close. Even more important, we show you how to alter the terms of the deal to protect against these risks. Unlike advisors who are paid only if the deal closes, we provide an impartial perspective on your anticipated returns.

A typical due-diligence review identifies and explains risks related to:

  • - Management
  • - Sales personnel
  • - Book of business
  • - Carriers
  • - Accounting
  • - Computer and phone systems
  • - Legal issues

We also look at special issues such as producer vesting and in each area discussed, we suggest remedies to minimize or eliminate the risks identified.

Each report includes a section that addresses specific questions posed by the buyer. We also work with the buyer's investment advisor and legal counsel to review the risks we've identified and our recommendations for avoiding risk through transaction structre or purchase agreements.

DETAILED OUTLINE OF DUE-DILIGENCE REPORTS:

    Management Risks and Issues
  • - Integration between buyer's and seller's corporate cultures
  • - Reliance on key executives
  • - Reputation among key carriers
  • - Reputation of seller in marketplace
    Sales Personnel Risks and Issues
  • - Ability to integrate with buyer's corporate culture
  • - Concentration of production
  • - Ownership of books by producers
  • - Deferred compensation exposures
  • - Ability to hir, train, and develop new producers
  • - Compensation issues vs. industry norms and buyer's own policies
  • - Tenure of producers
  • - Non-competition and non-colicitation protections
  • - Track record in retaining producers and dealing with departed producers
    Book of Business Risks and Issues
  • - Suitability with buyer's client base
  • - Concentration risk
  • - Market segmentation risk
  • - Risks associated with line of business
  • - Attrition rates
  • - Growth rates
  • - Stability of largest accounts
    Carrier Risks and Issues
  • - Service reputation and fit with expectations of buyer
  • - Product suitability with client base of buyer
  • - Concentration risk
  • - Quality of markets
  • - Commission rate risks and exposures
  • - Contingent-income risks
  • - Ability to assign carrier contracts
    Accounting Risks and Issues
  • - Fiduciary exposures and method of protection for buyer
  • - Receivable and collection policy
  • - Review of working capital position and trust position
  • - Review historical, projected an pro-forma income statements
  • - Analysis of internal accounting system
    Computer and Phone System Risks and Issues
  • - Level of proprietary systems and need for ongoing support
  • - Disaster recovery protocols and exposures
  • - Upgrading requirements to fit with buyer's internal systems
    Legal Issues
  • - Errors and omissions risks and experience
  • - Non-errors and omissions experience and expected exposures
    Special Issues
  • - Terms of servicing agreements
  • - Analysis of rates charged under servicing agreement
  • - Option or other shareholder agreements and impact on transaction
  • - Security interest issues