Exit planners and referral fees: how to disclose a reward and keep the owner in control

How should an exit planner disclose a referral reward?

In writing, before the introduction, inside the engagement documents the owner already signs, and with a clear statement that the owner decides. An exit planner coordinates attorneys, CPAs, wealth advisors and bankers, so the owner is entitled to know about every payment that could shape which resource gets mentioned. A data licensing reward belongs on that list.

This page is a working method, not a rule summary. Your credential body, employer, state and any securities or insurance licenses may impose stricter requirements, so check them first. This is general information, not legal, tax or financial advice.

Why exit planners are well placed and well exposed

Exit planners sit between the owner and the transaction. You run the readiness review, build the value-gap analysis, convene the advisor team and often hold the owner's trust through a multi-year runway. You also see which systems the business runs on, which ones will be retired at closing and which records the buyer will receive.

That position is useful for introductions and sensitive for conflicts. Referral income in an exit-planning practice usually flows through a network of professionals, so the owner may already wonder who gains from each recommendation. Naming a new reward openly protects the relationship.

Which owners in your book are worth a screen

Owners who plan to sell soon should hear about this early, because a licensing decision can interact with the purchase agreement. The page on referral opportunities for business brokers covers the deal-side view, and the explanation of the Section 15(b)(13) exemption shows why a licensing introduction is not an M&A matter.

The owner-control rule

Use one rule for every introduction: the owner asks, the owner decides, the owner can walk away.

• The owner has heard about the program and has asked for the introduction, or agreed to it after your disclosure.
• Your disclosure was written and dated before the introduction.
• Nothing in your planning fee, scope or timeline depends on the owner saying yes.
• You told the owner that their M&A advisor and attorney should review exclusivity and timing.
• You never handle, describe or forward the company's records.

Where to put the disclosure

Compare these with the way a counterpart role handles it in peer advisory group chairs' referral fee ethics, and with the question of whether to pass a reward through to a client.

Illustrative scenario

Illustrative: a fictional owner of a 120-person logistics software firm is eighteen months from a planned sale. In the readiness review, the exit planner learns the company will retire its old ticketing system next year. The planner's engagement letter already includes the third-party compensation clause, so she emails the owner a short note explaining the program and her possible reward, and suggests the owner raise it with the sale advisor. The owner decides to run the company through the fit checker first and applies only after the sale advisor confirms there is no conflict with the buyer's expectations.

What to say

The introduction email builder can draft a version for your style, and the what is a referral fee agreement explainer helps if you want a written agreement with another professional on your team.

How the introduction works

1. Disclosure first: the owner reads your note and says yes to a conversation.
2. Hand-off: you send the company name and basic fit facts through the referral form, or the owner uses your referral link to apply at sourcex.si/apply.
3. Screening: SourceX checks size, history, data breadth and rights.
4. Inventory and terms: the company lists its systems and agrees price and terms before buyers see anything.
5. Close: delivery follows an executed agreement, the company is paid once, and your reward follows only after SourceX receives its fee.

Questions to settle before you register

Take these to your credential body, employer or counsel. Write the answers down.

• Does my code of conduct require disclosure of third-party compensation, and in what form?
• Does my employer or network own the client relationship, and must the firm be the partner rather than me?
• Do any insurance, securities or tax licenses I hold limit referral income?
• Who on the advisor team must be told, and do I need the owner's permission to tell them?
• How long do I keep disclosure records?

How rewards work

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 cumulative per referred company. The reward is payable only after the buyer pays and SourceX receives its fee, and no reward is guaranteed. It is a share of SourceX's fee and never reduces what the company receives. State-level CPA or legal rules may still limit what a team member can accept, so see the guides to Illinois and Pennsylvania CPA rules if a CPA sits on your team.

When to hold back

• The owner is in a live auction and the sale advisor has asked for no new workstreams.
• The data mostly belongs to the company's customers, as it does at many outsourcers.
• You cannot disclose the arrangement to every advisor on the owner's team.
• The company has no one who can run exports.

Next step

Add the third-party compensation clause to your engagement letter, run one client through the company fit checker and, if it fits, register as a partner. Read the program terms before you sign.