TRANSITION TALK

Preparing to Sell Your Practice

Posted by David Grau Sr., JD on Apr 19, 2023 9:57:00 AM

Preparing to Sell Your Practice

The vast majority of today’s independent advisors only consider the option of selling to a third-party when it is time to retire or significantly throttle back as a last resort. Many advisors prefer a path with internal successors that allows them to exit gradually while building a strong, sustainable business. Many of these same advisors, however, come to realize too late that that process takes a fair amount of time, skillful execution, and next generation talent. As a result, a third choice emerges: that of attrition, which for most advisors is less of a choice and more of a default–keep working, enjoy the income, and let the practice slowly wind down if no better option emerges.

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Topics: Selling Your Practice

Tips for Increasing Firm Value

Posted by FP Communications on Apr 11, 2023 10:00:00 AM

 

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You invest a substantial amount of energy into running, growing, and evolving your business. Knowing when, where, and how to best direct your efforts could mean the difference in thousands, or even millions, of dollars long-term. Having spent two decades accruing and organizing essential datapoints on more than 15,000 businesses, we’ve got a tight grasp on what matters most at each step of the way.

Depending upon your goals, certain areas will move the needle faster than others. Rather than guess at the best use of your limited resources, our team has compiled a list of places where your ownership and C-Suite team can start assessing opportunities for increased firm value.

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Topics: Selling Your Practice, Business Growth, M&A, Revenue Strength, Business Value, Revenue Sharing, Multiples, Benchmarking, Valuation & Appraisal, KPI

The Perfect Fit

Posted by FP Transitions on Dec 7, 2022 1:43:00 PM

Blog - The Perfect Fit

In our post-covid M&A world, finding “the perfect fit” is paramount. While price plays a role in deals, it has much more to do with the merging or acquiring entity’s vision and proposed deal terms. Our team has an unmatched vantage point in this industry when it comes to buying or selling an advisory firm. After reading through tens of thousands of inbound inquiries and supporting over 2,000 M&A transactions, we’ve picked up on a few resounding themes. Here are our #FPInsights on which aspects are of vital importance to firms seeking an acquisition or merger.

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Topics: Selling Your Practice, Acquisition

Surviving Deal Fatigue

Posted by FP Transitions on Jun 28, 2022 9:30:00 AM

Surviving Deal Fatigue

Despite the continued surge of wealth management M&A activity, one surprising fact remains: most of these market participants are engaging in a transaction for the very first time.  While there are aggregators and larger RIAs that will continue to build up their business through strategic acquisitions, the majority of today’s deals spark from a mutual attraction either from aligned competencies, or complementary competencies, that allow both firms to amplify their growth and sustainability.   

According to James Fisher, Vice President of Mergers and Acquisitions at FP Transitions, “Many practices are looking to be acquired or merge with a larger business to spur growth, to benefit from economies of scale, to offload compliance and day-to-day operations, to increase bandwidth and offerings to clients, or to assist with the retirement of one or more senior owners/partners, among other reasons.”   

Regardless of experience, it takes a lot of patience, communication, time, and expertise to navigate the entire deal process. For firms going through this, on any side of the table, negotiating and documenting the transaction can often be more time consuming than anyone anticipated, creating the perfect environment for an all-to-common problem: deal fatigue.  

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Topics: Selling Your Practice, Acquisition, M&A, Business Value, Deal Structure, Buying & Selling, Mergers

M&A Mid-Year Update

Posted by FP Communications on Jun 8, 2022 12:00:00 AM

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We just got back from Fort Lauderdale where we spoke at the WealthStack RIAEdge conference for WealthManagement.com. James Fisher, FP Transitions’ Vice President of M&A spoke with several advisors onsite. We wanted to take some of the questions that we received and see if we could answer them for our broader client base.

HubSpot Video

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Topics: Selling Your Practice, Commentary, M&A, Business Value, Buying & Selling

Applying Our Own Advice to Ourselves, Not Just Our Clients

Posted by FP Communications on Jun 3, 2022 5:00:00 AM

Blog - Applying Our Own Advice

"Think about those future goals."

"Hold steady and don't react to the market."

"Remember, we have a plan and it's still well on track."

Throughout the market roller coaster of the Pandemic and now with 2022 rearing its head, advisors are getting used to coaching clients through market volatility. What matters most in these scenarios are two things: first, a trusted relationship between advisor and client, and second, preparation and education to navigate these emerging challenges.

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Topics: Succession Planning, Selling Your Practice, Business Value, Sustainability, Trends

Succession Planning Course Corrections

Posted by FP Transitions on Mar 29, 2022 12:30:00 PM

Course-Correction

Succession planning is a critical, foundational element in building a sustainable business. Incorporating new talent into your ownership structure is a process that takes continuous planning, evolution, and monitoring. When done correctly, succession planning ensures incredible employee culture, firm growth, and enduring business value. When the brunt of the planning is complete and documented with the help of partners like FP Transitions, firms have to stay focused as they begin executing their plan. Owners and next generation leaders must engage in transparent communication to navigate the inevitable bumps that can occur throughout the planning and execution of a succession strategy. The reality is, we’re all human. Life presents curves, and personal and professional goals can change. These anticipated bumps can necessitate larger course corrections in order to keep your plan on track.

Typically there are three areas where succession plans may need course corrections: if founder/owner plans change, if successor plans change, and if Plan B needs to be activated.

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Topics: Succession Planning, Selling Your Practice, Sustainability

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.

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Topics: Selling Your Practice

The Sell and Stay® Strategy

Posted by FP Transitions on Jan 3, 2022 10:39:00 AM

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.

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

2022 Trends & Predictions from the Experts

Posted by Doug Kenck-Crispin on Dec 7, 2021 4:09:57 PM

2021 is just about behind us, and 2022 is knocking at the door. What are the 2022 trends in the financial planning advisory space that we consult? We had an opportunity to ask our experts what they see in their respective crystal balls...

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Topics: Selling Your Practice, Acquisition, Multi-Generational Ownership, M&A, Business Value, Deal Structure, Financing, Bank Financing, Buying & Selling, State of the Market, Mergers, Tax Regulations, Building Your Team, Valuation & Appraisal, Transactions, Trends

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