Signing the sale agreement is the easy part. Three separate transfers have to land before the first renewal, and only one of them is about money.
The purchase agreement is the easy part. A book of short-term or life business changes hands on a multiple of annual commission, the parties sign, and then the acquiring brokerage discovers what it actually bought: a spreadsheet of names, a commission stream that only continues if each product provider agrees to move it, and a set of clients who have not yet agreed to anything at all.
Between signature and the first renewal there is a window — usually sixty to ninety days — in which three separate transfers have to happen. Each has a different counterparty and a different failure mode. Treating them as one project is what turns a fairly priced deal into an attrition problem eighteen months later.
| What moves | Who has to agree | What happens if it does not land |
|---|---|---|
| The commission stream | Each product provider, on its own forms | Commission keeps paying the seller, or stops entirely, and you are reconciling statements for a year |
| The client mandate | The client, per provider | You service a policy you are not appointed on, and the provider will not talk to you about it |
| Permission to message | The client again, separately | Your first outbound message is unlawful marketing, or blocked, or both |
The third one is the one that gets missed, because it is invisible in the deal documents. Nothing in a sale agreement gives you the right to message anyone.
Product providers do not run a common process. Some accept a bulk transfer declaration signed by the acquiring FSP’s compliance officer, confirming that all affected clients were notified of the transfer and consented to it. Others will not move a single policy without an individually signed broker appointment letter from each client, for each provider. Masthead’s practitioner note on buying a client book is blunt about the practical consequence: the deal economics assume a transfer rate that the paperwork may not deliver.
Two FAIS points sit underneath this. The selling FSP has to tell its clients that its services are terminating — that is not the buyer’s job and it should not be left to the buyer’s welcome message. And where a transfer means moving a policy to a different product provider rather than simply changing the intermediary on it, section 8 of the General Code of Conduct requires the actual and potential financial implications, costs and consequences to be disclosed to the client before it happens. Rolling a book onto your preferred insurer because it pays better is exactly the fact pattern that produces complaints, and Treating Customers Fairly outcomes 1 and 3 are the frame a supervisor will use.
The practical trap is contactability. Signed appointments cannot be obtained from clients whose numbers are three years stale, and a book with a low reachable rate is worth materially less than one with a clean contact file. Audit contactability during due diligence, before you agree a price: how many mobile numbers, how many verified in the last twelve months, how many already communicate with the seller on WhatsApp.
This is where acquiring brokerages most often assume continuity that does not exist. Under POPIA you are not stepping into the seller’s shoes; you become a responsible party in your own right, collecting personal information from a third party rather than from the data subject.
Three consequences follow. First, section 18 requires you to tell the data subject that you hold their information, where it came from and what you will use it for — a notification the seller cannot make on your behalf. Second, further processing has to be compatible with the purpose for which the information was originally collected: servicing the policies you have taken over clearly is, mining the book to cross-sell your other lines is a different purpose. Third, section 69 governs direct marketing by electronic communication, and the Information Regulator’s guidance note on direct marketing has tightened how narrowly the existing-customer exception is read. A client who became your customer yesterday because you bought their file is not the same as a client who has been buying from you.
What to put on the due diligence list, in this order:
An authorised FSP must notify the FSCA of changes to its licence details within fifteen days of the change. Where the deal involves a change of ownership or a new significant shareholder in the FSP itself, approval is needed before the change, not reported after it — a distinction that has delayed more than one closing. Representatives you take on have to appear on your representative register against the right classes of business, with their product-specific training, class of business training and supervision status carried across; our note on what a proper adviser handover looks like covers the individual version of the same problem. Check professional indemnity run-off cover for the seller, and check that your key individual has capacity for the classes you are absorbing. None of this is difficult. All of it is easy to leave until the month the commission starts arriving.
The WhatsApp Business Messaging Policy is written around a single idea: you may contact someone if they gave you their number and you received opt-in permission confirming they want messages from you, and you alone are responsible for the method of opt-in. Read that against a book purchase and the answer is uncomfortable but clear. Consent the seller obtained, on the seller’s number, is not consent you hold. Importing four thousand numbers and starting a template campaign is how a new sender number gets its quality rating cut in the first week.
A sequence that works over the first ninety days:
In ORIS this maps onto the parts of the product built for exactly this shape of work: a CSV import into Customers & Segments, opt-in state and source held on the customer record rather than in an adviser’s head, campaigns built from Meta-approved templates so the transfer notice goes out as a utility message, and audit logs that let a compliance officer show when each client was told and what they said back. Our new client onboarding use case and the opt-in request template give you wording to adapt, and the South Africa broker page sets out the regulatory background in one place.
One last thing worth saying to the seller before signature: ask them not to announce the sale to clients until your templates are approved and your numbers are loaded. The gap between “my broker has sold the business” and the first message from the new brokerage is where clients phone a direct insurer.
Not safely. You are a new responsible party collecting from a third party, so section 18 notification applies to you, and section 69 consent for electronic direct marketing was given to a different business for a different relationship. Service messages about the policies you now administer are on much firmer ground than promotional messages about your other products.
Long enough to run at least three contacts across two channels, and to accept that a proportion will never sign. Model the deal on a realistic transfer rate rather than the full book, and negotiate the price or an earn-out around it. Providers differ on whether they accept a bulk declaration or insist on individual forms, so confirm each one’s requirement before you commit to a timetable.
It depends on what is being sold. Buying a book of clients from another FSP is a commercial transaction between two licensed firms and generally sits in the notification lane — licence detail changes go to the FSCA within fifteen days. Buying the FSP itself, or taking a significant shareholding in it, is a change of ownership and needs to be cleared before it happens. Confirm the route with your compliance officer early, because it drives the closing date.
Move them deliberately and in waves. A brand new sender sending thousands of template messages to numbers that have never interacted with it invites blocks, and blocks drive the quality rating down for every client you already had. Start with the clients whose renewal is closest, so the message has an obvious reason to exist.
Contactability. A book where most clients have a verified mobile number and already message the seller is a book you can transfer. A book of postal addresses and landlines is a commission stream that will erode at each renewal, whatever the multiple says.
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