Financial Advisor (FA)
A financial advisor provides practical advice after consulting with individual clients on their asset management, land utilization, inheritance issues, and general finance. Mainly active in financial institutions such as banks and insurance companies.
There are various types of assets, such as deposits and savings, insurance, stocks, bonds, real estate, etc., but the important thing is to balance the investments and combine them well to use them effectively.
With the liberalization of financial and insurance laws and regulations, each financial institution now offers various products and services. As a customer, if you can leave it to a reliable financial institution at once, you do not have to worry about finance.
Financial advisors are in the limelight in response to these needs.
Some financial advisers operate as independent asset consultants. In addition to a wealth of knowledge about financial products and legal systems, it is a skill required of financial advisors to make proposals according to each customer’s life plan.
Role of Financial Advisor(FA)
Financial advisors (FAs) sometimes play an essential role in Mergers & Acquisitions(M & A).
FA is generally expected to play the following roles.
- Selection of buyers and sellers for M & A (origination)
- Advice on how to proceed with M & A schemes, etc.
- Advice on negotiations with the other party
- Calculation of corporate value
- Contract closing advice
What is the practice and role of FA?
There are various processes in M & A, and the practices and roles of FA are as follows.
M & A strategy planning
FA formulates M & A strategies, but since M & A is part of the management strategy.
Target (target company) selection survey
When it enters the stage where M & A is necessary, FA will conduct a selection survey of acquisition and sale targets. At this time, the value of the partner company is evaluated, and the introductory price is examined.
Survey on industry, market, regulation, etc.
When making an acquisition, we will investigate trends in the industry in which the target company operates, the size of the market, and the existence of legal restrictions.
Consultation with candidates
FA will narrow down the selection of the other party to buy or sell and confirm whether or not the other party has the intention to sell or buy. At this time, confirm under what conditions you intend to sell or acquire.
Advice on confidentiality and information management
Rumours may damage if confidential information is leaked during M & A negotiations.
Coordination of experts involved in acquisition audits
The accounting for acquisitions in M & A ultimately requires the approval of the accounting auditor. In addition, the advice of a tax adviser is required for tax treatment at the time of acquisition.
It is part of the M & A process. Due diligence is the process by which buyers investigate and negotiate acquisition targets to identify risks and predict synergistic effects.
Closing and PMI (Post-Transaction Integration Activities)
After the M & A is closed, PMI (Post Merger Integration) is performed.
PMI refers to all integration activities carried out after an M & A contract is concluded and mainly includes management integration, operation integration that integrates business processes, personnel, information systems, etc., and integration of organizations and culture.