TRANSITION TALK

The Sell and Stay® Strategy

Posted by Rachel Beckwith on Apr 2, 2019 1:50:50 PM

The Sell and Stay™ Strategy

Everyone has a unique vision of their future; we’re all trying to forge a path with our careers to that end goal where we can take a big breath and simply enjoy the life we’ve earned. While we might have an idea of the specific journey we will take, it’s important to remain open to alternate routes and unexpected shortcuts along the way. The hardest step on this journey for most is that which takes them out of the professional world they’ve been a part of for many years.

Unique goals and unique journeys require a creative strategy. For financial advisors, the Sell and Stay® path offers flexibility and freedom for an exit from the industry. There are advisors in the industry who have built a team of advisors with next generation owners and have built an internal transition into the sustainability of their business. The majority of our industry, however, is still made up of single-owner practices. Luckily, Sell and Stay® offers them the option of a similar exit path.

A Sell and Stay® exit falls somewhere between a traditional merger and an outright sale. It involves an owner selling his or her practice, but instead of walking away once the sale is complete, they stay on as an independent contractor or employee earning wages for work performed. This allows an advisor to continue to work with clients and earn an income without the full obligations of being an owner in charge of the operation.

 

This path can be a good option for single-owner practices where the advisor wants (or needs) to pull back from the practice to some degree. In fact, about 40% of the sellers FP Transitions has worked with in the last 6 months have sought liquidity AND to remain with the business as an employee for 3-5 years as part of the sale of their business. Common situations well suited for a Sell and Stay® strategy include:

  • Gradual retirement while preserving value
  • Transition into an “encore career”
  • Ongoing/chronic health issues (for the advisor or a loved one)
  • Renewed job satisfaction

Buyers, as well as sellers, can benefit from this unique strategy. Not all buyers are willing to facilitate a seller’s transition that involves their continued employment. Being open to a Sell and Stay® situation expands acquisition opportunities with reduced competition. Buyers also benefit from the former owners’ institutional knowledge and relationships, which help increase client retention and improve the success of the transition.

Your goals and vision of the future may be unique, but they are far from unattainable. Be open to twists and turns on your journey and think outside the box for new ways to approach your professional exit.

Learn more about the Sell and Stay® exit option including common situations and how it works in our new resource, “Sell and Stay® – A Unique Path for Unique Goals.” Download for free.

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FP Transitions pioneered the most successful strategies and best practices for executing this type of transaction. Give us a call at 800.934.3303 to talk with one of our experts.

Topics: Succession Planning, Selling Your Practice, Exit Planning, Sell and Stay™

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