TRANSITION TALK

Creative Acquisition Approaches

Posted by Rachel Beckwith on Aug 8, 2018 11:13:29 AM

Creative Acquisition Approaches

One of the fastest ways for independent financial service businesses to grow is to acquire another book of business, adding a lump of clients and their assets to a portfolio all at once. The reality is, however, that setting out to buy a business isn’t that simple. 

First, your business must be able to handle a sudden influx of new clients. Your infrastructure must be strong, you must have the people and resources available to provide quality service to clients immediately following the transition, and you must have the financial means to purchase. Second, the current marketplace right now is favoring sellers more than ever. Not only are we experiencing a 50:1 buyer to seller ratio on the open market, but values are at a high and the competition is stiff. We’re seeing a greater number of experienced buyers vying for a seat at the table, and we’re seeing more savvy sellers making strategic decisions. Finally, being able to meet the asking price alone doesn’t necessarily constitute a good fit. Even if you have everything in place to make an acquisition, you must meet a seller’s specific criteria in other areas to be considered.

The good news is that our industry has several other ways to achieve the same exponential growth as buying a book of business without a “traditional” acquisition. Strategies like mergers, continuity partnerships, succession planning, strategic partnerships, and sell & stay tracks offer alternatives for advisors who may not have the enterprise strength to execute a traditional acquisition strategy. The following avenues take planning and patience, but they can yield incredible growth and value in the long run.

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Topics: Acquisition, Buying & Selling, Mergers, Continuity, Sustainability, Equity Pathways

The Importance of Human Capital – A Founder's Perspective

Posted by David Grau Sr., JD on Aug 1, 2018 10:46:31 AM

Cultivating A Strong Team

Looking back over the past few decades, you can easily spot the trends and physical changes in our industry. Since 2000, when FP Transitions formally opened its doors, I’ve seen our profession, especially in those working under an independent broker-dealer or hybrid model, steadily shift to fee and advice-based solutions. Early on, most practices that we represented were made up primarily of transaction or non-recurring revenue; today advisors build businesses with a focus on fee-based income streams. Independent insurance companies are evolving as well with a sophisticated and wide array of recurring revenue.

Along the way, these practices have become not just more valuable, they are also physically larger and stronger. This requires more qualified people to analyze, give advice, produce revenue, as well as the adjunct talent to support these professionals. Looking forward, we see an ever increasing need to recruit and retain the best talent in the industry to support not just where your practice is today, but where that growing business will be ten years from now. Everyone has read about the need for recruiting; but the story has shifted in the past few years and will continue to do so going forward. Rather than simply hiring next gen talent as the need arises, this could well turn into a fierce competition to adequately reward and retain that talent as more and more advisory businesses reach the next level of success and draw upon a talent pool that has scarcity written all over it. 

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Topics: Business Growth, Enterprise Strength, Next Generation, Building Your Team, Equity Pathways

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

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