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.

The panelists agreed that not only was planning important, but sharing that plan with your family members and staff was key. Michael Shockley mentioned it could cost 3-6 times someone’s salary to replace them. The study included not only senior financial advisors, but junior advisors, managers, and support staff. When considering the next generation, 88% of the team members said the transition plan has a meaningful impact on them and 96% feel there is a risk of having no plan.

For advisors who have purposefully designed and managed a small firm, David’s advice was to start thinking about options now. You could sell it on the marketplace. Or if you wanted to continue working, you could merge into a larger firm. The more time you give yourself, the more options you have.

You can find a summary of the FPA/Janus Henderson study here or you can view the entire report here.

“Structuring your Practice for Growth and Sustainability”

David also presented “Structuring your Practice for Growth and Sustainability” on Wednesday. FP Transitions’ Succession Management clients are familiar with this concept: bringing in the next generation of owners to create a sustainable business. During the presentation he dove into supporting long-term goals with a properly structured entity and professional compensation strategy.

He described the differences between a book (a solo practitioner), a practice (solo practitioners under the same roof), a business (shared equity), and a firm (sustainable and multigenerational).

The benefit of being a book-owner is that you are nimble and adaptable but are limited to your individual production. For those desiring to grow, becoming a business or a firm can be done with long-range planning. Growth will include more staff, floor space, operations, and management. However, the benefit to the owner is being able to eventually work fewer hours while continuing to be a mentor, trainer, and guide to the next generation. As David put it, “Advisors overestimate what they can do in a year, but underestimate what they can do in a decade.” 

When asked by an advisor, “How do I get the next generation to think like an owner?” David answered, “Make them an owner.” On average, after 4-5 years of experience, a younger advisor can be offered a small ownership percentage. That first sale and transition from employee to a minority owner will give everyone a chance to test it out.

Until Next Year!

The Retreat featured many other valuable discussions, which were not limited to the scheduled sessions, but were ongoing throughout the week – in the halls, over breakfast, during Goofy Golf, and out on the lawn.


FP Transitions is a proud sponsor of the FPA and the NexGen. We were glad to get a chance to talk with so many advisors at the Retreat about their business successes and future planning goals as well as to hear some great stories. We’re already looking forward to next year, and to the upcoming FPA event: FPA NexGen Gathering. See you there!

Topics: FPA, Events

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