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.
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
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.
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.
Topics: Succession Planning, Business Growth, Next Generation, Sustainability, Building Your Team
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.
Topics: Business Growth, Industry News, Next Generation, Compliance, Client Retention, Wealth Management, Trends, Branding, Tech, marketing, Client Experience
The Sell and Stay® path is an often overlooked, gradual exit option hidden amongst the folds of internal succession, mergers, and external sales. For owners who need or want to work towards an exit but are not yet ready to leave the business entirely, Sell and Stay® is a perfect solution. Sell and Stay® allows an owner to continue working and earning an income without having to worry about matters such as management, day-to-day operations, or compliance.
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 Grow 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
BOOK REVIEW: Successful Hiring for Financial Planners: The Human Capital Advantage by Caleb Brown, CFP®
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.
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