Choosing an adviser

Selecting good quality corporate advisers is one of the most important steps in the flotation process. They will use their specific expertise to guide you through each part of the process.

A natural starting point is to consult your existing advisers, usually accountants and solicitors. If they do not possess the experience to act for you, they could recommend appropriate advisers. Many companies hold a ‘beauty parade’ of specialists to determine who has the appropriate experience and personality. When appointing advisers you should also clarify areas of responsibility in advance and negotiate costs.

You should agree a realistic timetable with your advisers, agreeing who is responsible for each aspect of the work. Choosing quality professional advisers is one of the most important tasks for a company preparing to float.

Which advisers does a company need to appoint?

The corporate adviser or Nominated adviser
The corporate adviser - or Nominated adviser (Nomad) in the case of AIM - will firstly assess whether your company is suitable for flotation. Once this has been determined, they will undertake a range of duties to co-ordinate entry to the market, including submitting the application to join the market on behalf of the company. They will assist in drawing together the prospectus and are responsible for ensuring that all the information contained in it is correct and complete.

In addition, they will advise on issues such as board structure, method of flotation, timetable, pricing and marketing strategy. They may also help you appoint other professional advisers.

The corporate broker
The corporate broker acts as the main interface with the stock market, assessing market conditions, the demand for your company’s shares and actively marketing them to potential investors. You may want to appoint a broker with experience of your industry, capable of stimulating investor interest both at flotation and in the after-market, to enhance liquidity in the shares and to maintain your company’s profile.

The reporting accountant
The role of the reporting accountant is different to that of the company’s auditors.
Their responsibility is to review the company’s financial records, which investors may use to make their investment decisions.

The lawyer
There are often two sets of lawyers involved in the flotation process – one to advise the company and one to advise the sponsor. Lawyers focus on verification of the prospectus and supporting documentation, and conducts due diligence in the company.

Other advisers
Other advisers you may consider appointing are a financial public relations firm to assist in raising the company’s profile and a registrar to manage your share register.