The Sell and Stay® path is an often overlooked, gradual exit option hidden amongst the other options of internal succession, mergers, and external sales. For owners who need to–or want to–work towards an exit but are not yet ready to leave the business entirely, Sell and Stay® is an excellent solution. A Sell and Stay® allows an owner to realize a gradual exit that retains value, income, and a more ideal day-to-day.
Topics: Buying & Selling, Exit Planning, Sell and Stay™
In our post-covid M&A world, finding “the perfect fit” is paramount. While price plays a role in deals, it has much more to do with the merging or acquiring entity’s vision and proposed deal terms. Our team has an unmatched vantage point in this industry when it comes to buying or selling an advisory firm. After reading through tens of thousands of inbound inquiries and supporting over 2,000 M&A transactions, we’ve picked up on a few resounding themes. Here are our #FPInsights on which aspects are of vital importance to firms seeking an acquisition or merger.
Topics: Selling Your Practice, Acquisition
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 to grow is to acquire another book of business. However, the process is more nuanced and competitive than most advisors seem to think. Most assume they will figure it out as they go along. If you take the unguided DIY approach, however, mistakes will be made–perhaps big ones–and you’re likely to leave money on the table. Our EMSTM
Professional members know this more than anyone, which is why they've engaged our experts to help them prepare and achieve their acquisition goals.
Like every aspect of business ownership, acquiring a book of business takes advanced consideration and preparation. These are a few steps you should be taking now, prior to developing and executing your acquisition strategy.
1. Develop Your Buyer Profile
Membership to fptransitions.com is free. We don’t believe there should be a series of hoops to jump through before you can explore the largest open market of M&A opportunities; or even to access our library of business building, acquisition, and succession resources.
Step one to taking advantage of your fptransitions.com membership is to complete your buyer profile. This series of basic questions gives the team at FP Transitions an overview of your company and team so we can best help you find acquisition opportunities that would be a good fit.
Pro tip: FP Transitions uses the information provided in your profile to search our database of 25,000+ advisors to find the right buyers for private sales, continuity partner matching, and successor searches.
The buyer profile is your opportunity to offer information that makes you stand out from your peers. The Practice Description field especially. If you offer a few concise thoughts on what makes your practice unique, you’re already setting yourself apart.
Topics: Acquisition, Business Growth, Business Value, Continuity Partner Matching
Key performance indicators, or KPIs, are data points which help businesses assess progress towards an intended result. Ensuring you take the time to Mark, Measure, Monitor, and Master those KPIs which will help you manage, protect, and grow the equity value of your business.
Topics: Benchmarking, KPI, EMS
Many small financial advisory firms don’t have a Human Resources Department. So when it comes time to seek out, hire, train, and develop employees, those tasks usually fall to the owner. They must figure out where to find candidates, what to ask in an interview, how much to pay, how to set up a training plan, and how to keep them engaged and motivated. That research takes valuable time away from the owner’s other obligations and productivity.
Topics: Next Generation, Talent Recruitment, Sustainability
While continuity plans are required by the U.S. Security and Exchange Commission (SEC), many advisors stop at the bare minimum, leaving their firm open to major disruption, and potentially an eroded value that leaves family or colleagues holding the bag.
Topics: Continuity Planning, Exit Planning, Continuity Partner Matching, Transition Plan, Continuity
For many years, our data has shown that firms with over $2M in annual revenue tend to grow twice as fast as those with $250K in annual revenue. Contrary to how it might seem, this is actually a function of their structure, not necessarily their size. These firms have cultivated efficiencies in cash flow, capacity, expenses, and operational systems to support scalability and growth. These sophisticated structures are accessible to most businesses–in a wide range of revenue levels–if they’re willing to explore and dedicate time and resources to improve.
Topics: Business Growth, Business Value, Client Retention, Benchmarking
Despite the continued surge of wealth management M&A activity, one surprising fact remains: most of these market participants are engaging in a transaction for the very first time. While there are aggregators and larger RIAs that will continue to build up their business through strategic acquisitions, the majority of today’s deals spark from a mutual attraction either from aligned competencies, or complementary competencies, that allow both firms to amplify their growth and sustainability.
According to James Fisher, Vice President of Mergers and Acquisitions at FP Transitions, “Many practices are looking to be acquired or merge with a larger business to spur growth, to benefit from economies of scale, to offload compliance and day-to-day operations, to increase bandwidth and offerings to clients, or to assist with the retirement of one or more senior owners/partners, among other reasons.”
Regardless of experience, it takes a lot of patience, communication, time, and expertise to navigate the entire deal process. For firms going through this, on any side of the table, negotiating and documenting the transaction can often be more time consuming than anyone anticipated, creating the perfect environment for an all-to-common problem: deal fatigue.
Topics: Selling Your Practice, Acquisition, M&A, Business Value, Deal Structure, Buying & Selling, Mergers
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We just got back from Fort Lauderdale where we spoke at the WealthStack RIAEdge conference for WealthManagement.com. James Fisher, FP Transitions’ Vice President of M&A spoke with several advisors onsite. We wanted to take some of the questions that we received and see if we could answer them for our broader client base.
Topics: Selling Your Practice, Commentary, M&A, Business Value, Buying & Selling
"Think about those future goals."
"Hold steady and don't react to the market."
"Remember, we have a plan and it's still well on track."
Throughout the market roller coaster of the Pandemic and now with 2022 rearing its head, advisors are getting used to coaching clients through market volatility. What matters most in these scenarios are two things: first, a trusted relationship between advisor and client, and second, preparation and education to navigate these emerging challenges.
Topics: Succession Planning, Selling Your Practice, Business Value, Sustainability, Trends