Pre-acquisition due diligence of the client base being acquired

As part of the acquisition of a regulated firm, the lawyers will carry out the legal due diligence, the accountants the financial part, but often no-one looks at the regulatory part until after the deal is done and then it is too late.

This can mean, in the worst case, the acquirer buys a number of clients/client assets that are inappropriate (we have found sanctioned underlying clients in such reviews that the acquirer has then had to deal with at a significant, unexpected and potentially risk to its reputation cost) or that the clients do not meet the regulatory standards such as Client Due Diligence, AML or they have suitability/appropriateness failings. These can be very expensive to remedy and worse, can cause the acquiring firm to be sanctioned by the FCA with the resultant costs and regulatory risk.

Our services in this area can include a short, risk based healthcheck upon a number of specified clients, to a full, all encompassing, review of the clients. Such a review will often pay for itself a number of times over as the acquirer will know exactly what they are buying in terms of clients/assets.

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