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

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

Posted by Kem Taylor on Mar 22, 2022 7:45:00 AM

Unsolicited offer to Buy – Is It Time to Sell?Blog Image-01

The market for wealth management firms has dramatically changed. 20 years ago, people didn’t see resale value in these businesses. When an advisor retired, they hoped they’d find someone who would agree to take over their book. As the industry matured, sales slowly 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 deal terms for businesses. It’s a seller’s market, and in our open marketplace sellers often field 75 or more inquiries for a listing. Practices are being purchased by synergistic partner firms that are aligned from principles, staff and client standpoint. There are many more options for an advisor than existed 20 years ago.

EXPLORING YOUR OPTIONS

Every firm I have talked with in the last year – both large and small -- has received inquiries and offers 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 current marketplace. Selling what you have built can be a good strategy when the time and circumstances are right.

Read More

Topics: Selling Your Practice

11 tips on where to look for the next new advisor to join your firm

Posted by Kem Taylor on Nov 29, 2021 7:57:00 AM

Recruiting Listicle_digestgraphic

The search for new talent can be time consuming and intimidating. As with any company, online job boards like Indeed and Monster are good starting points. There are other resources to supplement these tools, and as a financial advisory firm there are some unique tools you can leverage. Whether you’re looking to recruit experienced advisory professionals, or fresh, new talent, the following are 11 more resources for finding new talent.

Read More

Topics: Multi-Generational Ownership, Organizational Structure, Culture, Tip of the Week, Next Generation, Talent Recruitment, Sustainability, Building Your Team

Aligning Ownership Priorities for Success

Posted by Kem Taylor on Jan 28, 2021 2:17:34 PM

ownershipalignment_BlogBanner

In our over ten years’ experience helping businesses design and implement internal succession plans, we’ve seen that each generation—G1, G2, and G3—can, naturally, have their own distinct points of view and priorities. These differences are common and normal. By acknowledging these differences and communicating with each other, teams can adjust their expectations, align their priorities, and see their transition plans work out to the satisfaction of everybody.

But how do you align different priorities within your own ownership team? Below are three examples of how to facilitate this alignment. These examples are not of particular clients, but are taken from a conglomeration of advisor situations over the years.

Read More

Topics: Succession Planning, Acquisition, Business Growth, Next Generation

Don't Forget to Take a Vacation!

Posted by Kem Taylor on Jul 20, 2020 4:12:35 PM

vacation_blogbanner

I recently checked in on a client and she mentioned that she had to remind her staff to take vacation. As a small business owner, she wears many hats including H.R. As she processed payroll week after week she noticed her staff wasn’t requesting PTO. Her immediate concern was that employees would lose their accrued time off if they didn’t use it. More importantly, time away from work is necessary to get rested and charge your batteries.

Admittedly, “going on vacation” in these times may just mean closing and locking the door to your home office or taking your laptop and files off of the dining room table and putting them away for a few days. However, depending on where you live, you may be able to go out and safely explore local parks and trails or even go camping.

Read More

Topics: Culture, Sustainability

Preparing for Success in the M&A Arena : Pre-Qualifying for Bank Financing

Posted by Kem Taylor on Jun 10, 2020 1:59:16 PM

Preparing for Success in the M&A Arena

Acquiring a wealth management practice brings immediate growth and is an alternative to spending money and time on marketing to find new clients. That’s why there is currently an average 75-to-1 buyer-to-seller ratio. If you’re going to succeed in this arena, you need to stand out from that crowd. If you don’t have the cash on hand, one of the best steps you can take is to become prequalified for a conventional or Small Business Association (SBA) loan.

Twenty years ago, most acquisition deals consisted of a down payment of around 30% with the balance seller-financed through an earn-out arrangement. As fee-based practices became more prevalent, buyer demand increased. The combination of recurring revenue and increased demand pushed values higher and, in time, strengthened the underlying deal terms as well. Gradually we witnessed a shift to the use of performance-based promissory notes in place of earn-out arrangements. And, in the last seven years or so, the landscape changed yet again when the availability of bank financing entered the picture. This has afforded younger, smaller buying firms the opportunity to compete financially with larger, more established firms.

A place to start accessing this financing is to prequalify for a loan. A bank will review your finances and give you an estimate of how much they will lend to you. A bank’s prequalification tilts the acquisition playing field in your direction; you can knock out 90% of the competition. Sellers like the security prequalification brings to the transaction. In addition, you’ll be ready to move quickly if there’s a new opportunity or if a seller has a short time horizon.

Read More

Topics: Acquisition, Bank Financing

My First Virtual Conference!

Posted by Kem Taylor on May 22, 2020 11:04:00 AM

My First Virtual Conference

I had been looking forward to attending the Investment News Women Advisor Summit, but when an in-person event was no longer an option I was excited when Investment News did the ultimate pivot and changed their all-day onsite Summit to a virtual webcast.

Hotel and meeting rooms were cancelled, and their technology team got to work. The webcast was scheduled for May 14th. Attendees received an email the day before with directions on how to view the event that included a great video introduction from Liz Skinner.

A Digital Experience

I’d been wondering how a conference would work virtually. I didn’t know what to expect and it was easy. The eight sessions were listed on a main page. At the beginning time of the session, you just clicked the session’s “View Now” button, and you were connected. You could see each speaker and it was easy to access their bios, slides, and resources.

There were 600 people attending and speakers from 10 different cities–their largest event ever! Questions could be submitted throughout the sessions and were posted and answered in real time on social media using @investmentnews and #womenadvisersummit2020. Every session had a different topic and a bit of a different format which helped the time fly by.

Read More

Topics: Commentary, Investment News, Events

Next-Gen Impact

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

NextGen Impact_blogbanner

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.

Read More

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

Intrapreneur_blogbanner

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."

Read More

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

stagesofgrowth_banner

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. 

Read More

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.*

Read More

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