M&A adviser vs business broker

What a business broker does

Covered in full on choosing a business broker: lists the business, markets it, screens buyers, and helps negotiate a sale, usually of a single owner-operated business as an asset sale (the buyer takes the assets and goodwill, not the company itself).

What an M&A adviser does differently

An M&A adviser is more likely to be involved in:

• Selling a company by way of a share sale, rather than an asset sale.
• Deals with multiple potential buyers run as a structured process, sometimes called an auction.
• Coordinating due diligence across legal, financial and tax workstreams, often with external advisers on both sides.
• Advising on deal structure, earn-outs, vendor finance and how much is paid upfront versus deferred.
• Larger deals, where the buyer is a company, private equity fund or trade acquirer rather than an individual.

The line between the two is not a fixed dollar figure. It is set by how the deal is structured and how complex the process needs to be. A $2 million retail business sold as a straightforward asset sale to one buyer is broker territory. A $2 million company sold as a share sale to a trade acquirer, with an earn-out and a due diligence process running over months, is closer to M&A territory at the same price. Size alone is not the test.

Why the distinction matters even on a smaller deal

Whether a sale is structured as an asset sale or a share sale matters more than the size of the deal. An asset sale leaves the company, and anything not explicitly taken on, with the seller. A share sale hands over the company as it stands, including its history. This difference in structure, more than the size of the cheque, is what tends to move a deal from broker territory into M&A territory. It is worth asking about early, before an adviser is chosen.

When ASIC licensing comes into it

If you want to run a financial services business, you generally need an AFSL¹. Buying or selling shares on behalf of a client is dealing in a financial product, which is a financial service¹.

In practice, this means an M&A adviser structuring or running the sale of a company's shares may need to hold an AFSL or operate as an authorised representative of someone who does¹. If a sale is a share sale, ask the adviser directly whether they hold an AFSL or operate under one, and check the licence on ASIC's own register.

What to check before engaging an M&A adviser

• Whether your sale is structured as an asset sale or a share sale, and whether that changes what licence the adviser needs.
• Their AFSL status, if the deal involves selling shares, checked against ASIC's public register.
• Past deals of a similar size and structure to yours.
• How they are paid: ask whether it is a retainer, a success fee, or a blend of the two (see how business brokers get paid for how that generally works).
• Who else they are bringing in: due diligence, legal and tax advisers are usually separate from the M&A adviser, not included in their fee.
• Whether they have run a structured, multi-bidder process before, if that is what the deal needs.

None of this makes an M&A adviser a better choice than a broker for every sale. Most small business sales are exactly what a broker is set up to handle, and paying for M&A-style process on a straightforward asset sale buys cost, not value. Matching the adviser to the deal matters more than the size of the name.