4 Succession Solutions for Financial Advisors

Even though you may be focused on growing your practice, you’ll eventually need to think about how you want to handle your eventual exit. This is where succession planning consultants come in. They can help you develop a strategic plan for transitioning your business to someone else, with the goal of making the process as smooth as possible. Numerous companies offer financial advisor succession solutions to help you guide you through each step of the process.

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4 Financial Advisor Succession Solutions to Consider

It’s important to note that you don’t need to hire an outside consultant to handle succession planning. However, there are some advantages to having an expert on your side. Succession planning consultants can help you to:

• Identify challenges that may arise in succession planning
• Plan out your goals and vision for the future
• Develop a comprehensive succession plan that reflects those goals
• Implement each phase of your succession plan
• Help to ensure that each phase of the process meets compliance standards

Choosing a solution means first determining what you need help with the most. Once you have some expectations in mind, you can move on to comparing the specifics of individual succession planning firms. That includes the range of services they offer, the level of expertise they bring to the table and the fees you’ll pay.

With that in mind, here are four possibilities you might consider if you need help with succession planning.

1. LPL Financial

LPL Financial provides succession support for independent advisors who are interested in selling their practices¹. When you sell your book of business, LPL will help you execute your existing succession plan (if you have one), or develop one. Some of the benefits include:

• Deal structures that are tailored to individual goals
• Ownership transition support
• Strategic succession planning and exit support

LPL’s approach is designed to give you more time to focus on clients by offloading some of your more tedious operational tasks. Advisors receive dedicated support at each stage of the succession process, right up until they fully step away from the business.

2. FP Transitions

FP Transitions has been working with advisors to develop succession plans since 1999². Advisors work with the FP Transitions consulting team to develop a personalized succession and continuity plan that’s based on:

• Comprehensive business analysis
• Operational recommendations
• Formal valuation

Your team of consultants will work with your CPA and meet with your firm’s founders and successors to determine the best path for success. Succession plans are also supported by financial modeling, so you can better visualize outcomes for your business.

FP Transitions promotes longevity, profitability and sustainability for advisors who are ready to pass their business on to a chosen successor. The company stresses the importance of a long-term mindset, suggesting that succession planning can take anywhere from three to 15 years to complete. That’s helpful to know if you’re wondering when advisors should start succession and exit planning.

3. Succession Resource Group

Succession Resource Group (SRG) offers customized succession strategies to meet your needs³. The company works with advisors from firms of all sizes who are interested in passing their businesses on to another member of their team. There are two service packages available. Both include:

• A dedicated point of contact
• Contracts needed to initiate your plan
• Up to two contract revisions
• A minimum of 10 consultation calls
• Cash flow model analysis

The elite service package includes additional consulting and coordination with your CPA. Your finalized plan is preserved through SRG’s dedicated succession blueprint document.

Succession Resource Group focuses on advisors who already have a successor in mind. The company’s services do not extend to helping you choose or train someone to succeed you. SRG can, however, help you find a buyer through its Seller Advocacy Service.

4. Elite Advisor Successions

Elite Advisor Successions offers a comprehensive blueprint to help you sell your practice with confidence⁴. The platform is designed to help advisors connect with professional buyers to find the right match for their transition plans. Buyers may be willing to:

• Negotiate favorable payment terms to you
• Discuss sell-and-stay opportunities
• Agree to a partial sale in exchange for a minority interest in your firm

One of the first steps in the process is determining what your business is worth. Elite Advisor Successions offers advice on how to maximize your firm’s value ahead of its sale. The company is backed by Elite Consulting Partners, the largest financial services transition and business consulting firm in the U.S. You get the benefit of working with an experienced, knowledgeable team that’s committed to helping you make the most favorable deal possible.

Succession Planning Tips for Financial Advisors

Creating a succession plan, whether you do it alone or with the help of a consulting service, takes time. In the initial stages of planning, you’ll need to identify your goals and establish a general timeline for making the transition. You’ll also need to define what your succession will look like.

Here are some questions that can help guide you in the right direction:

• Do you have a successor in mind?
• Is the person you’re considering open to the idea of succeeding you?
• Do you have the time and resources to hire a successor, if necessary?
• How much time do you anticipate you’ll need to fully train your successor?
• If you don’t have a successor in mind, would you consider selling to an outside buyer?
• What disruptions to business continuity do you anticipate?
• What is your business worth now?
• How much value could you potentially add before you exit?
• When do you plan to fully exit the business?
• How are your clients likely to take the news?

These are some of the questions a succession planning consultant may ask before taking a deeper look at your firm’s financials.

They may also ask what your plans are after you’ve left the business, as this can influence your timeline and your preferred exit strategy. You may choose to retire, or continue working in some capacity. Visualizing your personal end goal can give you direction as you shape your succession plan.

Bottom Line

Leaving behind the business you’ve built can be bittersweet. But with the right plan in place, you can move toward the future more confidently. Working with a succession planning consultant may be something to consider if you’d like to have a helping hand at each step along the way.

Tips for Growing Your Advisory Business

• Building a profitable brand usually requires some strategic marketing to help you attract your ideal clients. Email marketing and social media can move the needle, but you may consider expanding your reach in other ways. Partnering with an advisor marketing platform can help you connect with qualified leads. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• If your exit is still years away, consider what you can do now to add to your firm’s value. That might mean developing a new service offering to increase assets under management, purchasing another advisor’s book of business, or entering into collaborative partnerships that put your business in the spotlight. Cultivating stronger relationships with clients can increase retention rates, while potentially leading to more referrals, which can drive growth.

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