TRANSITION TALK

For many RIA founders, strategic planning—including succession or exit strategies—is not a fun, “can’t wait to get started” activity. I’ve walked in those shoes.

It felt easier, for awhile, to just go with the flow of how the business was naturally unfolding. After all, our asset levels and revenues were up! Dealing with the more urgent, day-to-day tasks filled my days so it was easy to be the queen of avoidance and procrastination until circumstances were such that I—we—had to act.

We Were Pushed

For the record, I hate being pushed! Most people do.

But we were literally pushed to take succession planning action by both external and internal events in our business. In our situation, there was unexpected staff turnover, a partner’s illness and another’s untimely retirement.

A push could be any number of things that are happening to (and within) your business. A push could also be personal: your health, your marriage, your family. Whatever the circumstance or event, you feel forced to do something when you aren’t ready to take action, or it’s not what you thought you wanted.

Pulled by Vision

In an earlier post, “Mirror-Mirror”, I spoke of the importance of self-reflection and truly knowing what your own personal “win” is relative to your business as well as to the next chapter of your life and career.

For me, clarity around my own vision for our business and my own next chapter (aka my WIN-WIN) was key to experiencing a major shift in perspective.

My excitement about what I wanted next, truly pulled me forward. The feeling of being pulled to the next chapter actually helped to erase the worry and anxiety that had me resisting the process of negotiation and second guessing the sale of our business.

If you’ve been reading my recent posts, you know I consider myself a “win-win” gal.  You’ve read about how the self-discovery of my real win—not owning the business—was key to not only successfully exiting my business, but also launching what I now call “my next chapter.”  

Up to this point, I was primarily speaking of the founder’s win, and that of a buyer. In my research and work with clients who are firm founders, I have noticed that their perspectives on their own personal transition strategies often fall into two camps. That is, some are asleep at the wheel, relying on autopilot; and others are convinced they’ve already got a plan ready to go whenever they are.

In recent months, I’ve come to recognize there is one more win to add to the mix. This realization has come about as I met with a growing number of smart, hard-working “junior” professionals who are frustrated by a lack of clear strategic vision for the firm and their role in it. Even those who are designated successors, described a lack of transparency from the founders regarding the firm’s financial picture, vision and strategy.

This is the third piece in our series with guest writer Laurie Nichols (read the first here and the second here) that chronicles her personal journey of selling her her business four years ago.

After spending nearly 30 years in financial services, including more than a decade wearing the Chief Compliance Officer hat, I don’t often make definitive claims or promises.

However, as I reflect on what has brought me to where I am now—living and working with renewed energy and excited about the future—there is something I know for sure: A successful transition from business owner to an inspiring next chapter starts with looking in the mirror and challenging yourself. 

How I Know

As I started to experience some “mid-life wake up calls,” both personally and professionally, I resisted looking at the truth of where I was in a holistic way.

I was a worrier. A deeply committed worrier who thought the key to financial security and success was to just keep pushing the same old boulder up hill and hoping it wouldn’t roll down.

After Laurie Nichols out of her business four years ago - a transition that took her on a personal goal-setting journey (read about it in her first guest post here)- she was able to look back on the importance of planning ahead for a successful exit and future for herself and her business.

Over the years, as my partners and I grew our business, opportunities to monetize seemed to crop up regularly. We figured we had time though and relaxed into our comfortable position on the fence certain of a “someday score”–we thought there’d always be someone eager to buy and we’d be set.

We had no dates, no planning tasks, no target successor profile. We coasted on autopilot and didn’t really think much about someday–except the occasional fantasy about the cash out sure to come.

Wake up

Then, about 10 years ago, the wake up calls started and we realized someday was upon us with no “score” in sight. As I look back on my transformation from shareholder to seller, three particular wake up calls stand out as crossroads that could have easily been ignored.

The 4-year anniversary of the sale of my financial advisory business is rapidly approaching. 

The memories from 30 years spent in the financial services world, including 20 as a managing partner, haven’t completely faded yet. But the time away has allowed for a fresher perspective on the journey that brought me to where I am today.

It feels pretty amazing reporting from the other side of selling a business in the investment world. There are a blend of emotions—gratitude, energy, purpose and, most importantly, happiness.

I didn’t always feel this way.

Ownership Decisions

Being one of three shareholders in a “boutique” firm was like riding a roller coaster—at times completely exhilarating, and at others, totally terrifying.

We had the usual business challenges—market volatility, staffing issues, compliance rules, fee pressures. Fortunately, the successes we achieved far outweighed these challenges.

As the years ticked by, our commitment to making decisions that would ultimately benefit us when it came time for succession paid off. All the usual processes that are part of a sale were relatively (and fortunately) uneventful—due diligence review, operational preparation, deal structure, and transition. 

The Internal Struggle

What took me most by surprise was the internal tug of war; the mental and emotional in-fighting I started to experience. My self-doubts and fears kicked into overdrive. Why was this so hard? This is what we had all agreed we wanted, right? What if the clients are upset? What if I don’t like it?

Creating a succession plan can be a momentous task, leading to a transition that transforms not only the business, but lifestyle of everyone involved. It often takes a team approach to cover all aspects of the transition and the personalities involved. We understand our strengths and our limits in the planning process, and embrace the opportunity to work with diverse professionals, coaches and consultants. Each brings something new and valuable to the table, and their role in the process can be as unique as the business going through transition. This guest blog is part of a series featuring some of our partners and colleagues who contribute to the succession planning process and supplement FP Transitions’ analytical and strategic skill set.

Our first guest blogger, Marty Kurtz, CFP, is a past president of the FPA and a terrific example of an advisor who transformed his business and gained the flexibility to move on to a new, meaningful chapter in his career. After completing his own succession plan, Marty launched Turning Point, a coaching program centered on a 3-day getaway where successful advisors can gather with a small group of their peers to focus on their vision for the future. In his own words, Marty explains what led him to create this valuable retreat, and how Turning Point fills a void for his fellow professionals.