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 changing roles of the founder(s) and the successor team over many years.
Selling equity in the business in a series of steps or “Tranches” gives both the founder and the next generation of owners the time to wisely manage the transition and to prepare for the changes to come. The transfer of ownership from the founders (G1s), to the second and third generation of owners (G2s and G3s), starts with Tranche 1. Tranche 1 is usually a sale of 10% to 20% of ownership to the next generation. Tranche 1 is often called the incubator stage and allows for all parties to test the waters and to prepare the business structure for the journey ahead.
Read More
Topics:
Succession Planning,
Business Growth,
Next Generation,
Building Your Team
One of the most difficult challenges for independent advisory businesses is finding and retaining the professionals they need to service a growing client base and perpetuate sustainability. The talent pool is extremely competitive, especially in the financial services industry. The value of a strong team and integrated business is ever increasing, and the number of new advisors coming into the profession is still relatively low. To be successful in building the right team, you’ll need to be strategic in your efforts and focus on the people that best align with your business priorities and your plans for growth.
Read More
Topics:
Compensation,
Organizational Structure,
Business Growth,
Next Generation,
Talent Recruitment,
Sustainability,
Wealth Management,
Business Operations
It’s the dream scenario for a lot of financial professionals: business ownership. It sounds great, right? It means you get to make important business decisions, make more money, be the boss, and enjoy the freedoms that come with it.
It’s all true, but there is so much more to being a business owner. Your investments of time, energy, and money can come back to you in tremendous profits and satisfaction. There are also obligations that go along with the perks. Riding the highs and lows, responsibility for your team, and getting involved in every aspect of the business.
Building a business from scratch takes patience, resilience, and risks. Earning a place in the ownership circle of an existing business takes focus, commitment, and ingenuity. But the real question is: Are you ready to be an owner?
FPT RESOURCE: Rights and Obligations of Equity Ownership
Read More
Topics:
Multi-Generational Ownership,
Next Generation,
Leadership,
Business Operations
We’re coming off an incredible year from mergers and acquisitions yet again. In fact, we closed out 2022 as one of our greatest ever for FP Transitions, and the same goes for Live Oak Bank. We took a moment to reconnect with James Hughes, SVP of Advisory Lending for Live Oak Bank, to break down the key areas advisors should consider before they enter the 2023 mergers and acquisitions environment.
Read More
Topics:
Acquisition,
M&A,
Business Value,
Deal Structure,
Financing,
Bank Financing,
Buying & Selling,
State of the Market,
Next Generation,
Valuation & Appraisal,
"Buying, Selling, and Valuing Financial Practices",
Sell and Stay™,
Trends
/Blog%20-%20Catalyst%20for%20Growth.png?width=1200&height=628&name=Blog%20-%20Catalyst%20for%20Growth.png)
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 later, Colleen’s guidance on nurturing your team, evolving your own role, and adjusting your mindset to cultivate a stronger, more capable group of professionals is just as relevant.
Successful, ambitious, and conscientious advisors ask questions like: How do I create next-level growth? What will it take to build a firm that delivers an extraordinary experience to my clients and their families? How am I going to achieve my own next-level life?
The answer starts with another strategic question: What has to happen to give you the freedom to focus on precisely those aspirations?
Your catalyst for growth in all three areas lies in the talents of your team. Make your A players your #1 priority and you’ll have an alchemy that expands your available time and transforms exhaustion and obstacles into more space and energy.
/A%20Players.png?width=632&height=243&name=A%20Players.png)
But it doesn’t come without a cost. The cost is personal sacrifice of current habits, beliefs, ego, and behavior, plus an investment of more time now to blend together the ingredients for that alchemy. Your results will come from your ability to:
- let go and stay focused on the big picture,
- place yourself in service to your team, and
- treat them like your best clients.
Read More
Topics:
Succession Planning,
Business Growth,
Next Generation,
Sustainability,
Building Your Team
.png?width=1200&height=628&name=Blog%20-%20Tech%20Stacked%20(1).png)
Growth can be enabled – or hindered – by your technology. And not only that, but it can also seriously erode your profit margin if it costs you clients, requires constant fixing, or slows down cross-department collaboration. But here’s the thing: NOT using tech is the bigger mistake you can make. With so many best-in-class solutions on the market (and more appearing everyday), certainly having something is almost guaranteed to be better than nothing…right? Let’s explore your best tech investments that enable revenue growth in 2023.
Read More
Topics:
Business Growth,
Industry News,
Next Generation,
Compliance,
Client Retention,
Wealth Management,
Trends,
Branding,
Tech,
marketing,
Client Experience
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 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.
Read More
Topics:
Next Generation,
Talent Recruitment,
Sustainability
Business growth is a never-ending, and ever-changing objective of all business owners; financial planners included. While the lingering social effects of the pandemic and the challenges of upscaling during the Great Resignation/ Reshuffle can make the task-at-hand seem insurmountable, there are still tangible ways that you can steer the course of your enterprise. Here are a few tips to help grow your financial planning business.
1. Invest in Human Capital
Most advisors have built their business from nothing into their single most valuable asset. Finding talent can be a challenge these days, especially with unemployment settling into lows not seen in over 50 years. Data from FP Transition's Valuation Database has indicated that businesses with multiple professionals accumulate assets at a higher rate than sole practitioners. As your business matures, it is imperative to invest in the next generation of talent, to keep the engine running while you begin to enjoy the reward for what you’ve built.
Read More
Topics:
Acquisition,
Multi-Generational Ownership,
Business Growth,
Tip of the Week,
Revenue Strength,
Enterprise Strength,
Business Value,
Buying & Selling,
Next Generation,
Talent Recruitment,
Building Your Team,
Client Trust,
Business Operations,
Trends
Enhancing Your Successor Traits as a Woman in Wealth
Written by Jess Flynn, Communications Director at FP Transitions
Recent Bureau of Labor Statistics data details that women comprise 47% of the workforce, but just 29% of senior management positions. While more women are entering the financial planning profession, they are joining in marketing, administrative, or other staff roles within financial planning firms and related organizations. There is still a large gender inequity between females in leadership at these firms, and it becomes especially apparent as we look at the number of female owners in the financial advisory space.
As advisory firms continue to build profitable, transferrable and enduring businesses, one critical gap in this process has been around attracting and retaining diverse talent. While many firms have openly committed to embracing diversity, equity and inclusion within their firm, the effects of this are yet to be seen in the broader financial services community.
Read More
Topics:
Succession Planning,
Culture,
Next Generation,
Sustainability,
Women in Wealth
/Blog%20Banner%20-%20LLC%20vs%20Corp.png?width=1200&height=628&name=Blog%20Banner%20-%20LLC%20vs%20Corp.png)
LLC vs. Corporation. Which entity structure fits your goals?
Building a solid foundation for your business begins with selecting a legal entity and tax structure that will be most beneficial for your circumstances. When choosing the right entity for your business, it is important to identify both your short- and long-term personal and professional goals and consider the pros and cons of each option. Ultimately, a properly structured entity is foundational for growth and prosperity because cash flow and value are directly linked through a practice’s organizational and compensation structure.
Read More
Topics:
Succession Planning,
Organizational Structure,
Business Growth,
Tip of the Week,
State of the Market,
Exit Planning,
Next Generation,
Sustainability,
Wealth Management,
Valuation & Appraisal,
Business Operations
