TRANSITION TALK

Kem Taylor

Kem Taylor
Kem is the chief consultant for FP Transitions Succession Planning Support clients. She calls on her decades of experience in the industry in many different roles to help guide businesses with the ongoing review and assessment of their succession plans as they naturally evolve. Kem earned her Series 7, 24 and 66 securities licenses and is a Certified Business Exit Consultant™.

Recent Posts

BOOK REVIEW: Successful Hiring for Financial Planners: The Human Capital Advantage by Caleb Brown, CFP

Posted by Kem Taylor on Oct 17, 2018 1:01:45 PM

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.

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Topics: Sustainability, Next Generation, Talent Recruitment

NexGen Update from the San Diego FPA Chapter Symposium

Posted by Kem Taylor on Sep 28, 2018 10:01:00 AM

Earlier this month, I attended the San Diego chapter FPA Symposium. Along with case studies and market information, there were presentations on program updates for the next generation of advisors. I thought it was especially relevant to hear about their NexGen focused resources in light of Michael Kitces’ article published last week on our profession’s looming talent shortage: Competition For Talent And The Rising Shortage Of Next-Generation Financial Advisors. 

Here are some notable programs the San Diego chapter has set up with a focus on the next generation and getting future planners excited about a career in financial services.

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Topics: Events, FPA

Asking Your Boss for Ownership

Posted by Kem Taylor on Jun 21, 2018 10:10:21 AM

Asking Your Boss for Ownership

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

NAPFA National Conference 2018 - Recap

Posted by Kem Taylor on May 24, 2018 11:32:14 AM

Last week, FP Transitions attended the NAPFA Spring Conference in Phoenix, Arizona which wrapped up on Saturday. Thank you to all the clients and visitors who stopped by to visit with us. We always love hearing your questions, stories, and plans.

The Next Generation Showing

I was happy to see so many young people involved this year. NAPFA’s Genesis group–members 33 old and younger–was well represented and students from Kansas State University and Texas Tech University were working as event volunteers.

I had the opportunity to speak with several of them, and they said that in meeting so many advisors, they were learning what different job environments were available; they could work at a business with 100 advisors, join a solo practice, or anything in between. In doing this exploration, they have a better chance to start out on the right foot. It was exciting to see the early sparks of motivation and passion in these young advisors-to-be. 

Family Businesses

Several advisors stopped by the FPT booth to talk about bringing their son or daughter into the business. Having worked in a family business myself, I know how rewarding it can be. There are special considerations, though, and as advisors brought up, situation-specific concerns: How do we balance work and family? What impact does that have on the kids who aren’t in the business? How will it affect an office with non-family staff and advisors?

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Topics: Events, NAPFA

FPA Retreat 2018 - Recap

Posted by Kem Taylor on May 4, 2018 9:15:01 AM

Last week, FP Transitions attended the FPA Retreat in Phoenix, AZ. We want to say a big thank you to all our clients and the visitors who stopped by to talk with us. We had a wonderful time speaking with new business owners, exiting advisors, and many others at a variety of points in their careers and growth journeys.

“Succession Challenge”

On Wednesday, FPT president and founder David Grau Sr., J.D. joined Michael Shockley, JD, CFP™ of RGT Wealth Advisors and Michael Futterman of Janus Henderson Investors on a panel addressing the “Succession Challenge,” moderated by Julie Littlechild of Absolute Engagement. The discussion featured data from a newly-released FPA / Janus Henderson study.

While 73% of advisors don’t have a written succession plan, the good news is that an increasing number of advisors are setting a goal for the value they want to realize for their business and 75% feel they are on track to meet or exceed their goal.

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Topics: Events, FPA

An Unsolicited Offer to Buy – Is It Time to Sell?

Posted by Kem Taylor on Apr 10, 2018 11:39:15 AM

Is It TIme To Sell?

The market for financial services practices has changed. 20 years ago, people didn’t see resale value in a financial planning practice. When an advisor retired, they just hoped they’d find someone who would agree to take over their book. As the industry matured, however, sales started taking place. It wasn’t easy – there were no standards for valuation or deal terms, no strategies for client retention, few financing options, and concerns about liability.

These days, those issues have mostly been resolved, providing for a real marketplace and more competitive prices for practices. It’s a seller’s market, and in our open marketplace sellers often field 50 or more inquiries for every practice listing. Practices are being purchased by regional and national firms, RIAs, banks, and private equity groups. There are many more options for an advisor upon retirement than existed 20 years ago.

EXPLORING YOUR OPTIONS

What if you receive an unsolicited inquiry–either a letter in the mail, an office visit, or a phone call? If your business plans do not include selling, you could file the offer away for the future in a file that may well include other such letters. On the other hand, maybe the offer sparks your interest to learn more about what options you have in the marketplace. Selling what you have built can be a good strategy when the time and circumstances are right. 

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Topics: Selling Your Practice

Preparing for the Next Tranche in Your Succession Plan

Posted by Kem Taylor on Mar 7, 2018 11:21:00 AM

preparingfortranche2_banner.jpg

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 shift 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.

The second step, Tranche 2, tends to move ownership to 70%/30% or 60%/40%, with G1 retaining the majority ownership position. The tranche system – selling to G2s and eventually G3s – not only widens the ownership base but also provides increasing continuity support as the firm develops and the successor team comes together.

As our clients progress through Tranche 1 we are often asked, “When should we start Tranche 2?” And the answer is: It depends, but also know that Tranche 2 tends to start well before the final payments are made by the G2 owners in Tranche 1.

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Topics: Succession Planning, Next Generation, Business Growth, Building Your Team

3 Job Interview Questions Next Generation Advisors Should be Asking

Posted by Kem Taylor on Jan 11, 2018 12:58:24 PM

Next Generation Interview Questions

Working at a financial services firm can be a rewarding choice for the next generation of advisors. You can have real impact in people’s lives as you help clients set their financial goals and see them succeed over time. It is an environment where there is constant change and continued opportunities for learning. And, the financial services industry offers a lot of choice in terms of specialization, type of firm and location. It is important to find the right company and team to work with to put your career on the right path.

During a job interview with a potential firm you will have the opportunity to ask your own questions about the business and the team. Asking the right questions shows you are intelligent and engaged, in addition to providing you with critical information to help you make the right choice for your career.

You will, of course, have questions to ask specific to your own goals and concerns, but here are three relevant to every advisor's career that should be on your list:

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Topics: Next Generation, Talent Recruitment, Business Growth

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