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Creating a trade body for corporate finance pros

Your thoughts and suggestions?

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I'm setting up a professional body for corporate finance firms (and business brokers and other firms assisting in business disposals and acquisitions). I seek your advice and suggestions.

The US has the IBBA, Australia has the AIBB, the UK doesn't have an equivalent. FIBA, NACFB, ABFA etc., don't really do it.

ICAEW have a little directory of corporate finance firms, but this doesn't seem to be a top priority for them. In any case, they aren't interested in featuring business brokers, M&A advisory firms etc. Obviously. And they certainly wouldn't feature legal firms, VDR providers, escrow companies and all the other services around transactions.

I'm starting with a directory, I do have the most comprehensive set of data on who does what when it comes to providing services to buyers and sellers of businesses - from the business transfer agents to business brokers to CF and transaction advisory firms (operating in the lower mid-market to mid-market space) and some data on providers of related services.

My endeavour would be to expand that directory into a wider service organising events, discounts on CPD opportunities etc and providing market data and other member benefits.

I'm fortunate in that I do also know a lot of people in the industry - people working in corporate finance & people running business broker firms. And I've run the odd business or two over the last 35 years. But I'm sorely lacking any experience running a member organisation.

I'd appreciate any ideas, tips, suggestions, warnings or ... brickbats for even considering such an audacious project despite not owning a corporate finance firm myself. :)

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By WhichTyler
03rd Dec 2019 13:18

What is the benefit to the members of this highly competitive industry in joining the association?

Better reputation via some sort of kitemark, lobbying for policy/legal change, advice on how to spend the lavish fees?

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Replying to WhichTyler:
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By Clinton Lee
03rd Dec 2019 14:22

Good questions.

All of the above, I suppose.

The first benefit for members is finding clients. There is no national directory, no single source of information on who does what. I've been making a full time living these past few years filling that gap.

My new project will result in making it easier for people who need specific services to find the appropriate expertise, whether it's on exit planning, valuation, deal sourcing or drafting an SPA.

The second is reputation. Business brokers have a bad rap and that's because of a few bad players. I already have a code of conduct drafted, in consultation with people who have crafted such policies in the US and elsewhere. Member firms who sign up to the code will be recognised ...your 'kitemark' if you like.

At some point, yes, I'd like to see some regulation. CF firms stuffed to the gills with qualified accountants and regulated by the FCA are currently competing with all kinds of unregulated, fly-by-night business brokers providing "professional valuations" and taking large advance fees for doing little to no work.

With respect spending the lavish fees I charge, I'll struggle through that myself without any external help, but I'll let you know if I get stuck.

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Hallerud at Easter
By DJKL
03rd Dec 2019 14:04

Key will be how you decide who may join if you want it to be some form of quality mark re its members.

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Replying to DJKL:
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By Clinton Lee
03rd Dec 2019 14:23

Please see my reply to WhichTyler above covering the Code of Conduct.

With respect the directory, *everyone* will be featured. Every firm will have their own page. The ones with relevant qualifications, regulatory approvals, who are members of professional bodies etc., will have the option of paying an admin fee to have their credentials checked and then be allowed to display those credentials on their page.

A points system could be designed to decide order of ranking / presentation.

I did consider using as an input client reviews from a Trustpilot type review section. Review scores could play a part in any algorithmic sorting, but I've decided that reviews are too prone to manipulation. I might however include industry awards in any analysis (though I must admit some of these "awards", too, do seem a tad suspicious).

What would you suggest as good inputs to be considered in any algo sorting?

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