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 advisor-owners.
Next-generation advisors are in a unique position to leverage their generational experiences and opportunities that influence business value to carve out their ideal career path.
Opportunities Abound
The demand for financial advice is growing faster than the number of financial planners available to provide it. Household assets are increasing and the number of households with over $200,000+ in income has increased 10% in the last two years and is expected to climb.1 Along with accumulating their own wealth, younger investors are set to receive inheritances from their parent’s generation. The need for asset management is further exacerbated by the fact that the average age of financial advisors trends older so many are set to slow down or retire over the next ten years.
The battle for talent is upon us and it is important to recognize that as a next-generation financial planner, you have more career choices than ever. You can start your own business, or seek employment at a broker-dealer, bank, wirehouse, or RIA. Even those choices have many options within themselves. For instance, in terms of joining an RIA, 15 years ago, small firms were often the only option. Today, you can work for a smaller regional enterprise, a national company with hundreds of advisors and staff, or an RIA somewhere in between.
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Topics:
Succession Planning,
Multi-Generational Ownership,
Next Generation,
Sustainability,
Enterprise
In this Roundtable Talk, the next-generation ownership of FP Transitions discuss their own experiences in taking the mantle to shape the team and future of the business. They explore hiring for cultural fit and potential value, the definition of “ownership mentality,” and how they might identify potential G3 leaders in the generation beyond their own.
Watch a short clip below and click here to watch the full, unscripted discussion.
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Topics:
Succession Planning,
Next Generation,
Talent Recruitment,
Enterprise
In the October 2019 issue of the Journal of Financial Planning, FP Transitions' Christine Sjölin, VP of Strategic Development and Operations, contributed her article "Lay the Foundation for the Next Generation of Ownership." The article discusses the importance–and challenge–of seeking out and recruiting next-generation talent in the financial services industry. Christine explores implementing internship opportunities to recruiting new advisors, strategies for talent retention, and how to incorporate ownership opportunities into your compensation structure.
Read her full article, "Lay the Foundation for the Next Generation of Ownership," now at onefpa.org
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Topics:
Succession Planning,
FPT in the News,
FPA,
Next Generation,
Talent Recruitment,
Sustainability,
Journal of Financial Planning
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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, Marketing Director, H.R. Manager, IT Coordinator, Bookkeeper, and Visionary. They are their own boss. They create new things. They continuously solve problems. They have initiative. And, importantly, they can tolerate risk more than most people.
A lesser-known term is "intrapreneur."
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Topics:
Succession Planning,
Business Growth,
Next Generation,
Sustainability,
Enterprise
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 to sell externally, the planning process should start three to five years before you think you’re ready to actually sell.
Projecting an Off Ramp
As you forecast your exit timeline it’s important to consider factors like cash flow and how much will be required to move into retirement and maintain your desired lifestyle. You should also consider how long it will take to put your successor team in place and when you’ll be able to hand over the reins completely.
One of the best ways to make a timeline projection is to determine how much time you want to—or will realistically be able to—spend productively working in the office, and create a “workweek trajectory.”
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Topics:
Succession Planning,
Selling Your Practice,
Business Growth,
FP Transitions,
Sustainability,
Enterprise,
Sell and Stay™
FP Transitions CEO, Brad Bueermann, weighs in on the "trend" of consolidation among wealth management firms in Friday's New York Times Article, "Wealth Advisory Firms Are Merging, but What's in it for Clients?" by Paul Sullivan. Experts share their thoughts on the trend and whether or not the trend is actually resulting in better service for advisory clients.
We have seen that the ability to leverage technology and better processes indeed produces stronger and more valuable businesses, but access to these tools is not necessarily a function of size. As Brad says in the article, “We firmly believe at the client level that doing business locally with people who understand the community where their clients are going to retire into and who have a close connection to the client are better...Independent practices have flourished for a reason: Consolidation is the world we came from 30 years ago.”
Read the full article, "Wealth Advisory Firms Are Merging, but What's in it for Clients?" here.
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Topics:
Business Growth,
FPT in the News,
Sustainability,
New York Times
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 with thought provoking questions which open us to new ideas, help us to improve, and occasionally challenge basic assumptions behind the work that we perform. Sometimes questions are really out of left field and our curiosity leads us to an answer worth sharing.
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Topics:
Succession Planning,
Business Growth,
FP Transitions,
Sustainability,
Enterprise
Ahead of FA's 2020 Invest in Women's Conference in April 2020, Michaela G. Herlihy shares important insight and actionable advice for making the transition from employee to owner. She covers identifying and Implementing proper policies and procedures, creating a business plan, leveraging a skilled team of professionals, incorporating your key employees in strategic planning, and the importance of having a plan for the transition (that's where we come in).
Read the full article, "Roadmap to an Internal Succession Plan," at FA Magazine.
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Topics:
Succession Planning,
FPT in the News,
Next Generation,
Sustainability,
FA Magazine
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 you consider asking for ownership from the existing owners of your firm, you need to demonstrate that it is not only something you are capable of, but something you have earned.
Starting with these four steps as early as possible will help you build a strong case for ownership:
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Topics:
Succession Planning,
Multi-Generational Ownership,
Next Generation,
Sustainability
In our newest Roundtable Talk, Elite Client Consultant Kem Taylor and President David Grau Sr., JD, discuss the importance of time when it comes to planning, executing, and evolving your succession plan. During the conversation they cover examples of how FP Transitions has helped business owners navigate any changes to their plan including accelerating the timeline, adjusting the next-generation ownership team, and falling back to “Plan B”–selling the business.
Watch a short clip below and click here to watch the full, unscripted discussion.
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Topics:
Succession Planning,
Next Generation,
Talent Recruitment,
Enterprise
