Selling A "Producing" Broker Dealer

The process for selling your producing broker dealer is straightforward and not necessarily complicated. Achieving a good sale will, however, take time and effort. To the right buyer, your firm may be worth significantly more than to the wrong buyer, who does not understand your business.Additionally, the right buyer will be able to transition your client relationships easily. It is worth it to take the time to find the right buyer. And in this, you are not alone. BD Exchange’s real value is our ability to confidentially locate appropriate, qualified buyers – no matter how complicated your parameters are. Whether yours is a five-man shop or a 500 independent rep shop with many business lines, our dedicated, experienced professionals stand ready to help you acheive your goal. Below is a primer on the process of selling your producing BD.

Usually, by the time an owner has made the decision to sell, he/she is quite comfortable with BD Exchange’s process, having likely been in intermittent contact with BD Exchange for a couple of years – while gearing up to make the final decision. If you are just beginning to consider selling, please rest assured: there is no magic to this process; the right buyer is out there, right now, waiting to be introduced. Much of what we do involves finding out from you what your goals are, and then qualifying buyers to those parameters.   Much in the same way that we work with sellers for some time before the sale is made, we work with buyers over time.  We are constantly vetting buyers for all sorts of parameters. It is our greatest desire to provide you with a quick and efficient transfer; a buyer who has been looking for exactly what you are offering.

Stage One: Contact BD Exchange and Valuation

During this stage, potential sellers get to know us. We will provide any information we can, including a confidential, no-obligation current market valuation (please see the section of this website called “Valuation” for more information) of the firm, as well as detailed information regarding current “comparable” sales – sales similar firms and an explanation of what they have sold for recently. Every firm is unique, and every owner has goals of his/her own. These factors will directly inform the valuation process. But, once the decision has been made to go ahead and discreetly explore the market, we begin to qualify buyers.

“Okay, I’ve made the decision. How long will it take?”

Please keep in mind that it takes time to qualify buyers, and so we are constantly in the process of qualifying buyers. There have been times where sellers of firms have had near instantaneous results (in one case, an offer at the asking price in four hours)  – and have been frightened off, as if offering out a stock that got taken immediately, they wonder if they are priced too low. This is probably not the case; it is more likely that we have been looking on behalf of this buyer for some time, and they are very aggressive. Part of our value is that we are constantly qualifying buyers… On the other hand, it may take some time to locate a suitable buyer.Normally, for producing firms, the process takes several weeks to several months. Since transitions typically take some time to accomplish, it makes sense to take whatever time necessary to find the right buyer.

How Will It WorK?

We qualify buyers to a number of parameters, including financial, regulatory, and personal factors. Once we have a buyer whom we believe may be a good fit, we bring his information to you. It is important to note that at this point, the potential buyer knows nothing about you or your firm. It will be your decision to entertain this potential buyer – or not. Should you decide that you would consider dealing with this potential buyer, we then give him specific information regarding the firm – but at this point, not enough for him to identify your firm. Should he wish to move forward, at this point a conversation will be arranged. This can happen on a disclosed basis (if you are, at this point, comfortable revealing the identity of the firm) or on a non-disclosed, anonymous basis.


There should be significant synergies at this point. Should you decide to move forward to Due Diligence, normally the buyer will be required to write a letter of intent to purchase, and or place a significant good faith deposit with BD Exchange (in some cases, where the financial position of the potential buyer is well known, a deposit may not be required). Once BD Exchange has notified you that these items have been received, you would most likely meet the potential buyer, and exchange due diligence materials. The buyer will then have ten days to vett this information.


At this point, we will provide boilerplate documents to the buyer, which he will mark up at his cost to reflect an offer. During this time there may be many back and forth conversations between you, the buyer, and BD Exchange with regards to various terms and conditions.  We will do the very best we can to make sure that the Buyer’s offer reflects the Seller’s needs.

Please see the white paper on negotiation. While we will gladly act as intermediary and assist the buyer in making sure everyone is acting in good faith, it is well to note that we will not act as a hired gun for any party to push the negotiations into what we consider unfair and unsupportable pricing.

In the case of Larger Financial Institutions, there will likely be negotiating teams on both sides of the transaction. In this case, we will stand by to add value wherever possible.

Broker Dealer Exchange is a neutral intermediary. Our reputation is based on fair deals given current market conditions. We will do everything we can to assist both sides in arriving at mutually acceptable terms, to both parties benefit. In fact, the Sellers’ desired price figures directly into our qualification of potential Buyers. If a buyer is unable afford the seller’s price, they will simply not be considered qualified. While it may be true that buyers rarely get a “steal” when dealing with BD Exchange, at the successful conclusion, both sides will feel that they got a good deal.

Once a meeting of the minds has been reached, the buyer’s Counsel will mark the document up and submit to BD Exchange for review. BD Exchange will not review for legal issues, but will review for language with regards to regulatory issues. There may at this point be some back-and-forth between the buyer and BD Exchange. Once the document is ready for submission to you, it will be sent for you and your Counsel’s review. BD Exchange will interface between buyer and sellers counsels to get relevant issues resolved.

Once resolved, the documents are presented to you and counsel. If approved, you would then sign, and BD Exchange will supervise to see that counsel on both sides are satisfied that closing conditions have been met. It is usual at this point for the Buyer to escrow with BD Exchange all funds necessary to accomplish First Close, pursuant to the terms and provisions of the agreement. Normally, at First Close, Seller will receive the Initial Payment.

At this point, though the deal is “done”, there are many issues yet to be resolved, pursuant to the Purchase Agreement, such as buyer’s application for regulatory approval. BD Exchange will “hold hands” with the buyer throughout this process, to help ensure that the transaction is approved by the regulatory authorities in a timely efficient manner.