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

Next-Gen Impact

Posted by Kem Taylor on Oct 23, 2019 5:11:16 PM

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The sustainability of financial services businesses depends on the incorporation of new talent. The demand for next-generation talent continues to increase as longevity, continuity, and staying competitive become top priorities for many financial advisor-owners.

Next-generation advisors are in a unique position to leverage their generational experiences and opportunities that influence business value to carve out their ideal career path.

Opportunities Abound

The demand for financial advice is growing faster than the number of financial planners available to provide it. Household assets are increasing and the number of households with over $200,000+ in income has increased 10% in the last two years and is expected to climb.1 Along with accumulating their own wealth, younger investors are set to receive inheritances from their parent’s generation. The need for asset management is further exacerbated by the fact that the average age of financial advisors trends older so many are set to slow down or retire over the next ten years.

The battle for talent is upon us and it is important to recognize that as a next-generation financial planner, you have more career choices than ever. You can start your own business, or seek employment at a broker-dealer, bank, wirehouse, or RIA. Even those choices have many options within themselves. For instance, in terms of joining an RIA, 15 years ago, small firms were often the only option. Today, you can work for a smaller regional enterprise, a national company with hundreds of advisors and staff, or an RIA somewhere in between.

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Topics: Succession Planning, Multi-Generational Ownership, Next Generation, Sustainability, Enterprise

Entrepreneurs Need Intrapreneurs

Posted by Kem Taylor on Oct 8, 2019 2:49:38 PM

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We all know what an entrepreneur is. Many independent financial advisors would likely identify themselves as an entrepreneur. 

Many entrepreneurs worked 18-hour days to get their business off the ground and wore all the hats in the company–CEO, Marketing Director, H.R. Manager, IT Coordinator, Bookkeeper, and Visionary. They are their own boss. They create new things. They continuously solve problems. They have initiative. And, importantly, they can tolerate risk more than most people. 

A lesser-known term is "intrapreneur."

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Topics: Succession Planning, Business Growth, Next Generation, Sustainability, Enterprise

Accessing the Next Stages of Growth

Posted by Kem Taylor on Jul 17, 2019 11:02:25 AM

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Over the last ten years, increasing numbers of advisors have begun the process of creating sustainable businesses. Many advisors started out as a book or a practice—one-generational models. They took steps to create much more valuable, multi-generational businesses by focusing on enterprise strength and setting up or restructuring essential business structures.

The M&A marketplace is becoming increasingly competitive. Businesses need a strong value proposition to step away from the crowd. Owners who have taken steps to work on building their enterprises are in the best position to leverage their unique business aspects to access more growth opportunities and become successful acquirers or merger partners. 

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Topics: Succession Planning, Multi-Generational Ownership, Organizational Structure, Business Growth, M&A, Sustainability

Rights and Obligations of Equity Ownership

Posted by Kem Taylor on Apr 18, 2019 9:21:21 AM

Rights and Obligations of Ownership

As more wealth management businesses look to internal succession, more new owners are being created. As a next generation advisor, you should consider whether ownership is the right path for you, and it is important to understand what ownership entails. Owners of a privately-held business, even with a minority position, enjoy several rights and privileges in exchange for their investment in the company, but they are also responsible for meeting certain obligations.

The following rights and responsibilities apply to all owners whether the business is a corporation governed by bylaws or a limited liability company with an operating agreement.*

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Topics: Succession Planning, Multi-Generational Ownership, Business Growth, Next Generation, Sustainability

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: Next Generation, Talent Recruitment, Sustainability

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: FPA, Events

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: FPA, Events

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

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