In late April, the Federal Trade Commission voted to finalize their Non-Compete Rule which prohibits the inclusion or enforcement of non-compete clauses in employment agreements in the United States. The rule is currently set to go into effect on September 4, 2024, but is the subject of active litigation which may delay or stop it from going into effect. The FTC’s Non-Compete ban applies to most employer-employee business relationships (with limited exceptions), but how will it affect wealth management and financial services businesses like yours? How will it impact your ability to protect the assets and value of your business if and when team members decide to leave the firm?
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Topics:
Industry News,
Client Retention,
Talent Recruitment,
Building Your Team,
Equity Pathways,
Client Relationships,
Client Experience
In late April, the FTC voted to finalize and promulgate their Non-Compete Rule which prohibits the inclusion or enforcement of non-compete clauses in most employment agreements. Industry experts from FP Transitions and Key Bridge Compliance sat down this week to discuss the details of the Rule, the level of concern business owners in the industry should have, and which other means advisory owners have to protect their business. You can listen to the full discussion here.
Below are essentials that you need to know about the FTC’s Rule.
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Topics:
Industry News,
Client Retention,
Talent Recruitment,
Building Your Team,
Equity Pathways,
Client Relationships,
Client Experience
Whether you’re looking for seasoned talent or up-and-coming professionals to fill out your team, a winning recruitment strategy is built with intention. It's not just about the role you need to fill, but also about identifying the type of person who best aligns with your business’s culture and future growth goals.
What is the reason for adding this person to the team? Is it simply a matter of capacity? Or are there some other opportunities you can seize in the process? Recruiting the right person can also address your goals to:
- Expand your service offerings
- Diversify your client base
- Create improved operational efficiencies
- Secure continuity of client service
- Prepare for succession of business ownership
Understanding which of these align with your existing business plan will help you to tailor role descriptions and find the very best person. Setting the table for success requires vocalizing the right words, expectations and opportunities to your new hire at the outset. Additionally, this focus will help you to communicate what you can offer to attract your ideal candidate.
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Topics:
Compensation,
Business Growth,
Culture,
Talent Recruitment,
Building Your Team,
Equity Pathways
The growth and profitability of your business are interconnected. Top-line revenue growth is essential, but it is no good without bottom-line profitability.
Balancing growth and profitability comes down to compensation structure and the equity pathways created for owners of the business. The profits generated through properly structured equity pathways are a catalyst for growth and the means to accomplish long-term strategic objectives including recruiting new talent, internal succession, and acquisition.
In our newest webcast, VP of Research and Analysis Eric Leeper, CFA®, discusses compensation solutions for businesses in varying stages of growth and how these strategies can boost both top-line growth and bottom-line profitability.
View webcast clip below and click here to watch the full video.
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Topics:
Compensation,
Succession Planning,
Equity Pathways,
Enterprise
The transfer of ownership to a team of next generation talent allows a business to leverage the individual strengths and fresh energy of a younger generation. As a new advisor, ownership provides stability, equity stake, and voice in the future of the business. As a founder, incorporating this team elevates your business, secures longevity, and sparks a new level of growth. The arrangement creates a win-win opportunity for both the founder and the next generation owners.
In our new Roundtable Talk, Elite Client Consultant, Kem Taylor, and our President and Founder, David Grau Sr., JD, discuss the process of going from next generation advisor to next generation owner and the common questions that come with it. They explore the benefits for both founder and next generation owners as well as the importance of communication between the generations for a successful integration.
Click here to watch the full, unscripted discussion.
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Topics:
Succession Planning,
Talent Recruitment,
Equity Pathways,
Enterprise
Independent financial advisors face an almost overwhelming set of challenges, but with challenges come opportunities. Many of these challenges fall into areas of:
- Mergers & Acquisitions
- Growth & Profitability
- Talent Retention
- Succession Planning
These opportunities and challenges are often interrelated. Tackling one challenge often helps solve another, thereby strengthening your business in other ways. A successful acquisition is supported by a strong enterprise that is capable of handling exponential growth, and building a strong enterprise requires the incorporation of next generation talent. Retaining and nurturing next generation talent is made possible with the proper compensation systems, and maintaining an effective compensation system demands business profitability. Bottom-line profitability increases when it is properly balanced with top-line growth. Finally, to bring it all together, growth is supported by building a strong, sustainable enterprise.
In this new webcast, President and Founder David Grau Sr., JD, discusses the top challenges and opportunities of the profession and how they can be addressed using an end-to-end, integrated strategy.
View webcast clip below and Click here to watch the full video.
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Topics:
Compensation,
Succession Planning,
M&A,
Talent Recruitment,
Equity Pathways,
Enterprise
In our new Roundtable Talk, Founder and President, David Grau Sr., JD, and Elite Client Consultant, Kem Taylor, CBEC®, explore internal succession and describe how both the succession process and business growth can benefit from multigenerational experiences and knowledge from all owners.
They also discuss other factors that benefit the succession planning process, including:
- Acknowledging the "time" factor – having enough time to plan for, implement, and make adjustments to a gradual, internal transition of ownership
- Helping next generation advisors understand the benefits and responsibilities of ownership
- Recognizing that each succession path is different
- Exploring "where you are" and "where you're going" before jumping into the process
Click here to watch the full, unscripted discussion.
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Topics:
Succession Planning,
Talent Recruitment,
Equity Pathways,
Enterprise
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 unprepared this growth path can be challenging and technically complex.
There has also been a significant increase in competition for traditional acquisition opportunities in recent years resulting in the transactions not being as economically viable as in years past–especially for an advisor seeking to use the cash flow of the acquired book to pay for the acquisition.
Luckily, there are a few other strategies that offer the potential for meaningful growth and, over time, might even provide greater enterprise value. Strategies like mergers, continuity partnerships, equity pathways for next-generation owners (G2 owners), strategic partnerships, and Sell and Stay® transactions offer alternatives for advisors who may not have the enterprise strength or firm depth for a traditional acquisition. These alternative options take planning and patience, but can yield incredible growth and value in the long run. Many of these strategies also present powerful opportunities to create enterprise value when combined with an advisor’s organic growth.
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Topics:
Acquisition,
Buying & Selling,
Mergers,
Continuity,
Sustainability,
Equity Pathways
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 broker-dealer or hybrid model, steadily shift to fee and advice-based solutions. Early on, most practices that we represented were made up primarily of transaction or non-recurring revenue; today advisors build businesses with a focus on fee-based income streams. Independent insurance companies are evolving as well with a sophisticated and wide array of recurring revenue.
Along the way, these practices have become not just more valuable, they are also physically larger and stronger. This requires more qualified people to analyze, give advice, produce revenue, as well as the adjunct talent to support these professionals. Looking forward, we see an ever increasing need to recruit and retain the best talent in the industry to support not just where your practice is today, but where that growing business will be ten years from now. Everyone has read about the need for recruiting; but the story has shifted in the past few years and will continue to do so going forward. Rather than simply hiring next gen talent as the need arises, this could well turn into a fierce competition to adequately reward and retain that talent as more and more advisory businesses reach the next level of success and draw upon a talent pool that has scarcity written all over it.
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Topics:
Business Growth,
Enterprise Strength,
Next Generation,
Building Your Team,
Equity Pathways
As I talk with young advisors at local events and national conferences, I’ve increasingly heard concerns about broaching the topic of future ownership in the firm where they work. Some junior advisors have been promised ownership but don’t have anything in writing. Others don’t know the best way to bring up the topic in the first place.
It can be intimidating to ask the founder if their plans for their practice include you. However, you need to plan your career and to know how it will impact your family and life outside the office.
Take for example, Jennifer’s story:
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Topics:
Succession Planning,
Next Generation,
Equity Pathways
