Succession Planning

Building an enduring and profitable business on your terms.

Succession Planning Defined The FP Difference Our Process Get Started FAQ

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Longevity

A multigenerational team will generate and
perpetuate your work.

Profitability

Centralized cash flow and optimized expenses with
an eye to the bottom line.

Sustainability

Business elements structured to support long-term
firm goals and growth.

Owner's Guide to </br> Succession Planning

Owner's Guide to Succession Planning

Watch our webinar to see to David Grau, Sr., founder of FP Transitions, discuss pivotal moments in developing your succession plan.

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Plotting Your Exit

When planning your exit timeline, it's crucial to take into account elements such as cash flow and the amount needed to transition into retirement while sustaining your preferred lifestyle.

Intrapreneurial Excellence - Aligning Entrepreneurial Vision with Internal Talent

Today’s independent financial advisors face an endless array of opportunities (and challenges). Let us support you in building out your own unique succession plan. Check out our eBook below.

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Our Process

Our consulting team collaborates closely with you to craft a tailored succession and continuity plan. To construct both short- and long-term strategies, we conduct a comprehensive analysis and provide recommendations to enhance critical aspects of your operations, including organizational, entity, compensation, and profit structures. Our services also encompass a formal valuation. Our analysts meticulously model various transition and financing strategies, empowering the next generation of owners while assisting founders in realizing the full value of their endeavors. We work in tandem with your local CPA, conducting separate meetings with founders and successors to ensure a comprehensive understanding of the opportunities and responsibilities associated with small business ownership. Ultimately, you will receive a detailed plan summary, often spanning a decade or more, supported by financial models—essentially, the "blueprints" for your business.

Equity Management Solutions®

Each EMS™ membership encompasses two fundamental advantages: a valuation and a continuity plan designed to oversee and safeguard your practice.

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Enterprise Consulting

The Enterprise Consulting Program embodies FP's end-to-end solutions for financial advisors. In this program, our team of professionals discerns client goals, offers resources and recommendations, and oversees plan design and implementation through our Analytics, Valuation, and Legal teams. Schedule with one of our experts to learn more.

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Succession Management Program

FP Transitions' Succession Management Program empowers financial professionals with tailored strategies for seamless transitions, ensuring continuity and prosperity in their practices. We transform single owner practices into multi-generational firms. Schedule with one of our experts to learn more.

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Advisors Who Trust Us

Nearly a decade ago, we engaged FP Transitions with a clear goal in mind: to accurately value our practice and lay the foundation for the transition of ownership. Their guidance was invaluable. From the beginning, they expertly navigated us through each step, offering wise counsel and ensuring nothing was overlooked. Reflecting on the journey, I cannot think of anything which should have been done differently. The fee paid to FP Transitions was an excellent investment for our firm, not an expense.

James “Skip” Nichols and Financial Planning Resources
Six years ago, we partnered with FP Transitions to craft a succession blueprint for our company. Today, we're thrilled to be executing our fourth series of transitions to the next wave of owners. The integrated expertise of FP Transitions, encompassing Consulting, Valuation, Analytics, and Legal services, has consistently streamlined the process, ensuring each handover is a success.

Sonia Ernst

Managing Partner, Manager of Trading and Operations, Cabot Wealth Management

Frequently Asked Questions

What do you mean when you say succession?

Technically, succession refers to the succession of ownership of a business and its clients. This can mean transitioning ownership completely to an advisor outside of your business through an external sale or sell & stay. Or, as it’s more commonly referred to at FP Transitions, it can mean the planned and gradual succession of ownership from within a team. This process of internal succession, often happens over the course of years (3-15) and relies on an incremental sale of ownership every few years or so to minority owners chosen from amongst the existing team of a business.

What’s the difference between succession planning and continuity planning?

In the financial services industry especially, succession is planned–either through an external sale or internal transition. A succession plan is a set timeline and terms for the transfer of some percentage of ownership to another thus securing the ongoing stewardship of a business and its client’s assets. Continuity planning refers to the process of putting safeguards in place in case of unexpected death or disability of an owner so as to not leave clients without service or estates without realized value. For single-owner businesses this is usually an agreement made with a local colleague and accounts for the trigger, transfer, and compensation. Internal succession plans that include multi-owner, multi-generational leadership have continuity safeguards built in and don’t generally need additional agreements in place.

What if younger advisors can’t afford to buy-in?

Part of succession planning is accounting for the fact that younger owners often don’t have the excess capital to buy a percentage of ownership outright. Additionally, advisors at the point in their career where ownership opportunities appear on the table often are of the age where they’re buying houses and starting a family. Our internal succession plans include the mechanism for using the first couple of years of profit distributions to pay for their shares using a variety of financing options.

How do I choose my successors?

Firstly, an important aspect of internal succession is creating long-term ownership and sustainability for the business, this means you should be choosing younger professionals to add to the ownership team. In terms of kind of skills and traits you should keep an eye out for, that depends on your priorities and your vision of the business in the future. Professionals who demonstrate a commitment to the success of the business as a whole and express interest in the non-advisory aspects of business ownership are already ticking some important boxes.

One thing to be wary of is choosing someone exactly like you. The same skills and mindsets it took to single-handedly build your business, or to take your firm to where it is now, are probably not going to be the exact same things that take things to the next level of growth. Internal succession is about building a multi-generational team of individuals who all utilize their individual strengths to ensure the business continues to thrive beyond any one career.

How long does internal succession take?

An internal succession plan can take anywhere from 3 to 15 years, perhaps more. The idea is that the transfer of ownership is incremental and gradual, so the time it takes for a minority owner to become a majority owner depends on the goals of existing and planned owners. It could be that minority owners take over only a small percentage of ownership and don’t add to that for several years, or it could be that after two years a majority owner may decide to fully retire and minority owners purchase the remaining ownership shares in a large chunk. Also, for some firms, it could be that internal succession is never-ending, as the ownership shares shift and some retire still more generations of owners can be added and this process can be continual for the life of the business.

How do I know when to start setting up my internal succession plan?

It’s never too early to start thinking about internal succession and what your exit might look like one day. So, start now. The earlier you start, the more control you have over the plan and the more options you have. This doesn’t mean you have to start selling ownership and retirement next month, it just means that it takes time to build a business large enough to take on a team and to recruit top talent. Then it takes time to determine if they’re ownership material and work out the plan. And then the years it takes to actually make the incremental and gradual transfer ownership. Not to mention the time that might get eaten up if there are any hiccups that might set you back a couple of steps. If you start early enough, you can be building the business with the end vision in mind.

Succession Planning

Longevity

Profitability

Sustainability