ARE YOU CONSIDERING THESE IMPORTANT STAKEHOLDERS IN YOUR TRANSACTION?

Finding the right transaction partner, and executing a potentially complicated and emotional transition, can attract most of the consideration in an M&A deal. It’s important to...

Your firm’s succession plan is designed to gradually transition ownership, leadership, and growth responsibilities to the next generation of advisors. The goal is sustainability of the firm, and it is accomplished through a plan that coordinates...

The financial services industry is a personable one. Professional networking and client prospecting depend on your charisma and ability to connect beyond surface pleasantries. But when it comes to selling your business, it’s important to keep your...

Mergers & Acquisitions – everyone’s favorite topic. Understandably so when one of the fastest ways to grow is to acquire and as such, add exponentially more clients (and assets) to your business in one fell swoop.But what about mergers? Mergers are...

In my work in years past, I became a professional traveler. I spent a lot of time in airports, and I got to talk to many of the pilots. Airline pilots are adventurous souls who enjoy finding ways to go faster, fly higher, and see things from a...

Purpose, perspective, and premise are the foundations of business value. With these three key aspects we can weigh an incredible amount of detail and data to determine the most accurate value of the business–for any circumstance. The more accurate...

Whether you’re buying or selling a business, there are a few players that are “must-haves” on your transaction team: personal lawyer, CPA/Tax professional, representative of your IBD/Custodian, personal stakeholders, and a non-advocate,...

The value of your practice is determined by many factors, some obvious, and some not so obvious. And the degree to which some aspects impact your value more largely depends on the reason you’re valuing the business in the first place. 

Whether...

Even though it had been in the works for years, last month’s Schwab/Ameritrade merger left both organizations’ advisors wondering what it meant for them. The good news is that the transition has been seen as largely successful, with only some tech...

The decision to sell a financial services practice is a difficult one for any advisor to make. After a lifetime of work to build your business, and after years of earning your clients’ trust, how do you turn the job over to someone else? Will they...

For our clients, the courses of action may differ, but growth is the number one priority. The goal could be to grow and then sell it to a third party for maximum value. Alternatively, the aim could be to create a sustainable enterprise capable of...

End the Cycle: How to Make Marketing a Constant Business GeneratorMarketing powers growth, which is why it’s a priority when we’re in need of more business. But over time, with great marketing, business starts booming. That’s when many advisory...

I have one of the best jobs in the financial services industry. Every day, I get to talk to independent advisors, young and old, and together we plan for the future. The journey of building a business that can outlive its founder is exciting,...

The vast majority of today’s independent advisors only consider the option of selling to a third-party when it is time to retire or significantly throttle back as a last resort. Many advisors prefer a path with internal successors that allows them...

Editor’s Note: We originally posted this article by Colleen Jordan Hallinan in 2018. Since then, the need for business owners to focus on building the right team in order to grow and establish sustainability has only increased. And so, five years...

I rarely meet a financial advisor who doesn’t immediately mention that they want to buy a practice. It seems to be every advisor’s goal. Of course it is. And in my fifteen years in the industry, I have seen why.

One of the fastest ways for a firm...

Brown, Caleb. Successful Hiring for Financial Planners: The Human Capital Advantage. Coventry House Publishing, 2018.

Many small financial advisory firms don’t have a Human Resources Department. So when it comes time to seek out, hire, train, and...

Succession planning is a critical, foundational element in building a sustainable business. Incorporating new talent into your ownership structure is a process that takes continuous planning, evolution, and monitoring. When done correctly,...

The market for wealth management firms has dramatically changed. 20 years ago, people didn’t see resale value in these businesses. When an advisor retired, they hoped they’d find someone who would agree to take over their book. As the industry...

Recently, a client told us that since she had implemented a formal continuity plan, her clients have felt more comfortable adding assets to their portfolios now that their tenure with her business is protected. This stability of continuity is an...

Everyone has a unique vision of their future; we’re all trying to forge a path with our careers to that end goal where we can take a big breath and simply enjoy the life we’ve earned. While we might have an idea of the specific journey we will...

During our 2021 Mid-year Market Update, in addition to up-to-date transaction data and trends, our experts, M&A Director James Fisher, JD and CEO Brad Bueermann, explored some myths and misconceptions about the current M&A marketplace.

The problem...

Last month our M&A Director James Fisher, JD and CEO Brad Bueermann delivered our 2021 Mid-Year Market Update and explored marketplace activity for the first half of 2021.

We all know that 2020 was a truly unique year on all fronts. The financial...

Many financial services businesses focus on revenue strength while downplaying–or ignoring–enterprise strength. However, revenue strength and enterprise strength are both critical to the growth and sustainability of a business. When revenue is the ...

We know it’s common to focus on getting a new client by sharing just enough information to win the sale. Often, that comes down to a quick diagnosis based on what thesalesperson wants to sell, rather than what the client truly needs.

We don’t do...

Recurring revenue is one of the most important single determinants of value. Revenue produced through management fees, trails, or renewals is ongoing and reasonably predictable. Transactional revenue is more elusive and difficult to predict. While...

As an owner of a successful financial advisory business, you understand that the team you’ve built is vital to that success. Taking the next step and giving your top talent the opportunity to become owners can increase your growth and ensure that...

The term “synthetic equity” refers to a set of compensation tools that is commonly used to provide key employees some of the economic benefits of ownership without actual stock changing hands. While existing owners may benefit from synthetic equity...

Selling your business is a big decision. The good news is that demand is high and you have many options for structuring your exit. You also have many places to conduct your buyer search: reaching out to your professional and community networks,...

Today’s Independent financial advisors face an endless array of challenges and opportunities. Identifying challenges before they arise is key for finding solutions and developing strategies for tackling the issues that present the greatest...

Acquiring a wealth management practice brings immediate growth and is an alternative to spending money and time on marketing to find new clients. That’s why there is currently an average 75-to-1 buyer-to-seller ratio. If you’re going to succeed in...

Completing an annual valuation on your business is the financial service industry equivalent of undergoing your annual physical. I’ll turn 55 this year and I have resigned myself to the fact that prescription medications have officially become...

I had been looking forward to attending the Investment News Women Advisor Summit, but when an in-person event was no longer an option I was excited when Investment News did the ultimate pivot and changed their all-day onsite Summit to a virtual...

Synthetic equity may be the right solution to solve a host of long-term employee issues. It is used to retain, motivate and reward employees when traditional compensation programs are not enough, staff are not yet ready to be partners or...

For many financial advisors, it has become commonplace to receive unsolicited offers in the mail. The offers to buy practices usually promise a competitive valuation and purchase price, great terms and future opportunities, and are backed by...

“Instead of focusing on the circumstances that you cannot change—focus strongly and powerfully on the circumstances that you can.” –Joy Page

One of my favorite movies of all time is Casablanca. This 1942 American romantic drama is revered for its...

The last thing any business owner and professional needs is to deal with more ambiguity and uncertainty than the global situation has already dealt us. In our highly regulated industry, many advisors are asking questions about how to keep their...

Ongoing developments with COVID-19 have prompted a number of advisors to contact us and make sure their death and disability continuity plans are up to date. It’s worth noting that only about 30% of advisors have any type of formal, written death...

Many things are up in the air right now, and we’re all experiencing major changes to the way we live our lives. It’s no wonder that investors—and advisors—are wondering the best course of action as markets fluctuate and many businesses can’t...

The last few weeks have been eerie. The markets are fluctuating, schools are closed, streets are deserted. The Portland area had a run of 65-degree sunny days followed by two days of snow. Our office is down to a skeleton crew, and the rest of the...

Things have been changing for years, more and more people work from home and do so productively. Gone are the days, for many industries, where being in an office is a requirement. As technology continues to improve and online communications have...

With school closures across the country and many parents working from home, we asked a seasoned, work-from-home pro, our Marketing Director Elise Rogers, how she’s adapting to working remotely with her three boys full time. Below she shares a tool...

Professionals working in the independent financial services industry tend to organize their business the same way as other professional service providers. Whether a dentist, lawyer, or wealth advisor, chances are that the firm owner is both a...

As industry leaders in designing and facilitating internal succession plans for financial advisory firms, the leadership team at FP Transitions has its own talented, multigenerational ownership team in place. Our next-generation leaders have unique...

Your principal advisor has invited you to become an owner. Congratulations! The majority of next-generation advisors are energized by the demand for and the opportunity of succession planning, but most founders are stalled leaving successors...

Happy Holidays from the FP Transitions family!

In our first book “Succession Planning for Financial Advisors,” founder David Grau Sr., JD recounted one advisor’s early succession journey, including his ownership team’s bumps and triumphs as they executed the first tranches of their plan. Today,...

The sustainability of financial services businesses depends on the incorporation of new talent. The demand for next-generation talent continues to increase as longevity, continuity, and staying competitive become top priorities for many financial...

We all know what an entrepreneur is. Many independent financial advisors would likely identify themselves as an entrepreneur. 

Many entrepreneurs worked 18-hour days to get their business off the ground and wore all the hats in the company–CEO,...

When should you start developing your exit plan or succession plan?

The short answer is: start the planning process early. Successful internal succession planning can be a 10- to 15-year process so give yourself adequate time. For advisors who want...

We write a fair number of white papers every year. As thought leaders, it is part of our job to share our thinking with independent financial professionals in order to advance the profession. In our consulting work, our clients often challenge us...

As a next-generation advisor, pursuing ownership as part of your career path is an important decision. Business ownership requires a variety of skill sets and comes with both benefits and responsibilities that go beyond the role of advisor. Before...

Over the last ten years, increasing numbers of advisors have begun the process of creating sustainable businesses. Many advisors started out as a book or a practice—one-generational models. They took steps to create much more valuable,...

Whether you are buying or selling, it is important to understand what is being bought and sold and what expectations both the buyer and seller have of each other. Absent these details, it is difficult, if not impossible, to determine if an offer is...

Advisors constantly seek an answer to the questions “How can I grow faster?” and “How can I increase the value of my practice?” Generally, their focus is on acquisition. However, growth and value are not singular concepts. In other words, achieving...

There has been a fair amount of talk over the past decades about consolidation in the financial services industry. Most of the white papers and articles addressing this concept have presented it in a negative light as though it signals the end of...

Our new Trends in Transactions and Valuation Study includes expert insight, commentary, and predictions for the state of the financial services industry. The study dives into last year’s M&A numbers and examines how industry businesses and their...

As more wealth management businesses look to internal succession, more new owners are being created. As a next generation advisor, you should consider whether ownership is the right path for you, and it is important to understand what ownership...

A large percentage of advisory businesses use some form of revenue-sharing arrangements, or an eat-what-you-kill system, that rewards sales and production tied to the top line, not the bottom line. This is true of small practices as well as larger...

Take a look around your hometown. Your favorite places: the coffee shop, bookstore, brewery, dry cleaner, and salon that you frequent on a pretty regular basis are all small business–or at least started that way. Just like you. These founders had a...

Mergers are transactions that can take on many shapes, apply to almost any size advisory enterprise, and are infinitely customizable depending on the unique details and situations of the participating advisors.  

Advisors commonly think of a merger...

Happy Holidays from the FP Transitions crew!

The last few years I’ve been unable to attend the FPA annual conference due to personal commitments. It was great to be back on site for this year’s event in Chicago.

The Future of the Industry

As an Official Sponsor of the Next Generation, we are...

Earlier this month, I attended the San Diego chapter FPA Symposium. Along with case studies and market information, there were presentations on program updates for the next generation of advisors. I thought it was especially relevant to hear about...

You’ve built a business providing financial insight to a growing community of clients. You’ve fostered this relationship over the years and established a trusted role in their lives. As your clients have moved along their journey as professionals,...

The average advisor faces a difficult and increasingly competitive industry. With industry consolidation, technological advances, increased competition, more regulatory oversight, and the need to recruit and retain talent, it has never been more...

Last month FP Transitions President and Founder, David Grau Sr., JD, joined Scott and Pat on the Advisor2Advisor podcast to discuss common concerns related to mergers, and an all too prevalent (and costly) mistake that some mature advisors make...

The foundations for FP Transitions were laid in 1999, and that makes our company officially 20 years old this year. I founded this company thinking that I knew a lot more about running a business than I actually did at the time. Armed with a law...

The wealth management M&A arena is extremely competitive. Sometimes it seems like just about everyone is racing to buy a business. On average, our marketplace sees over 50 inquiries for every acquisition opportunity listed. That number can be...

One of the fastest ways for an advisor to grow their business is to acquire another advisor’s book of business. Most advisors see this “traditional acquisition” route as a quick and easy way to increase their revenue and managed assets, but if...

Looking back over the past few decades, you can easily spot the trends and physical changes in our industry. Since 2000, when FP Transitions formally opened its doors, I’ve seen our profession, especially in those working under an independent...

Over the past two and a half decades of working in this industry, as a regulator, an attorney and now at FP Transitions, I can safely say that I have never seen a better time to be the seller of an independent financial services or advisory...

Last week, FP Transitions attended the NAPFA Spring Conference in Phoenix, Arizona which wrapped up on Saturday. Thank you to all the clients and visitors who stopped by to visit with us. We always love hearing your questions, stories, and plans.

...

“Mergers & Acquisitions” is a phrase that gets used off-handedly, but those are substantially different transactions. An acquisition itself is a complicated enough process. But in a merger there are the additional components required to wholly...

Last week, FP Transitions attended the FPA Retreat in Phoenix, AZ. We want to say a big thank you to all our clients and the visitors who stopped by to talk with us. We had a wonderful time speaking with new business owners, exiting advisors, and...

The single, biggest threat to an independent advisory practice is not the lack of a succession or exit plan, it is the lack of a plan to protect client interests and business value in the event of an owner’s sudden death or disability. And still,...

This week our President & Founder, David Grau Sr., J.D., is traveling to NYC to receive anIcons & Innovators Awardfrom Investment News along with 19 other incredible industry visionaries and thought leaders.

We are incredibly proud of David and...

Completing a formal valuation is step one. Step two is securing that value with a continuity plan.

Having a formal, written continuity plan in place for the unexpected exit of an owner–especially if they’re the only owner–is paramount to ensure...

Setting up and agreeing to proper and reasonable payment terms is an essential part of the selling or acquisition process. The following questions are common for both buyer and seller when it comes to deal structuring, especially in regard to...

Business succession from parent to child is an age-old practice in human history, from humble cobblers to royal families. The practice stemmed from necessity—parents taught their children the trade they knew in an effort to teach them to survive....

In many professions and in most businesses, succession planning and sustainability are not pressing issues. Most people don’t need a multi-generational dentist office, for instance. Who really cares if the neighborhood hamburger stand or your...

Working at a financial services firm can be a rewarding choice for the next generation of advisors. You can have real impact in people’s lives as you help clients set their financial goals and see them succeed over time. It is an environment where...

In our second book, Buying, Selling, and Valuing Financial Practices (the M&A Guide), we introduced the term of a “predatory buyer” to our readers. If you are thinking about selling your practice one day, you need to understand how certain buyers...

You took the risk to become independent, hung out the shingle, and spent a myriad of sleepless nights worrying about how to build a business that paid the mortgage. A few bumpy months led to a smoother ride over the years; you now have a strong...

Last week our president and founder, David Grau Sr., JD, joined BMO Global Asset Management’s Better Conversations. Better Outcomes. Podcastto discuss buying or selling financial advisory practices. The 30-minute podcast explores:

• How to prepare...

For many RIA founders, strategic planning—including succession or exit strategies—is not a fun, “can’t wait to get started” activity. I’ve walked in those shoes.

It felt easier, for awhile, to just go with the flow of how the business was naturally...

DENVER - The Financial Planning Association® (FPA®) is pleased to announce that FP Transitions is now FPA’s “Official Partner of the Next Generation of Financial Planners” in an effort to support young professionals on their career journeys in the...

Introducing our new web series: Roundtable Talks. We’ll feature FP experts–along with some guests–sharing their opinions on what’s going on in the financial services industry.

Real experts, real opinions, no script.

Our first episode centers around...

The following sections are excerpted from the book Buying, Selling, and Valuing Financial Practices by FP Transitions president and founder David Grau Sr., JD.

Let's highlight the importance of having a strong transition team in your corner as...

Probably not. 

When one person’s misstep in using a common industry practice gets reported in the press or a blog, a reader may worry if he or she has also strayed. Some have this response to the recent Tax Court case Fleischer v. Commissioner. The...

If you’ve been reading my recent posts, you know I consider myself a “win-win” gal.  You’ve read about how the self-discovery of my real win—not owning the business—was key to not only successfully exiting my business, but also launching what I...

It’s been a while since “keeping it in the family,” assumed your literal family. Yet, many advisors approach succession with pride when they have the opportunity to pass their advisory legacy to a son, daughter, niece, cousin, or other relative.

...

Rough Seas

In the heyday of maritime exploration, traveling the world’s oceans promised adventure and immense risk. Turbulent seas and unfavorable weather endangered crews, threatened ships, and spoiled the best-laid plans. Seasoned captains...

This is the third piece in our series with guest writer Laurie Nichols (read the first here and the second here) that chronicles her personal journey of selling her her business four years ago.

After spending nearly 30 years in financial...

Picture a bright orange life raft floating on a dark blue, storm-tossed ocean. In this durable, well-built, small craft sits an independent financial advisor. Our advisor has a paddle for propulsion – the means by which to move the raft to safer...

In past years, the slow and steady migration of independent financial service providers to the independent Registered Investment Advisory (RIA) channel has been well documented. As the number of state and SEC registered advisors continues to swell,...

After Laurie Nichols out of her business four years ago - a transition that took her on a personal goal-setting journey (read about it in her first guest post here)- she was able to look back on the importance of planning ahead for a successful...

In the M&A space for the financial services industry, everyone wants to acquire. Few advisors, however, take the time to sit back and think about what they want from the acquisition: what kinds of clients and assets would complement the existing...

The 4-year anniversary of the sale of my financial advisory business is rapidly approaching. 

The memories from 30 years spent in the financial services world, including 20 as a managing partner, haven’t completely faded yet. But the time away has...

Our new book Buying, Selling, & Valuing Financial Practices - The FP Transitions M&A Guide is now available. Order your copy here, and watch the video below to find out why our President & Founder, David Grau Sr., JD decided to [literally] write...

FP Transitions client Greg Hoffman found the best match for his business, Hoffman Financial Resources, when he added Ross Lawrence to his team 5 years ago. Ross shared Greg’s commitment to the community and passion for helping the people of Nevada,...

Creating a succession plan can be a momentous task, leading to a transition that transforms not only the business, but lifestyle of everyone involved. It often takes a team approach to cover all aspects of the transition and the personalities...

With an average 50:1 buyer to seller ratio, advisors are looking for a leg up on the rest of the buyer pool. But you can’t find your “edge” until you’ve taken care of the basics.

These weekly tips will provide you with basic steps EVERY buyer needs...

After being in the financial services industry for over a decade, there is one thing I have found to be an almost universal truth: Independent financial advisors absolutely love what they do. The topic of selling is often sensitive and difficult...

In the past month it seemed like our inboxes and Twitter feeds exploded with articles on “robo advisors.” Not necessarily a new technology, these automated platforms are setting off some threat alarms in the financial services industry.

It seems...