TRANSITION TALK

Addressing Sustainability – One step at a time.

Posted by FP Transitions on Jan 12, 2022 12:54:26 PM

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Topics: Continuity Planning, Webcasts, Multi-Generational Ownership, Organizational Structure, Business Growth, Tip of the Week, Business Value, Client Success, Sustainability, Client Relationships, Business Operations

11 tips on where to look for the next new advisor to join your firm

Posted by Kem Taylor on Nov 29, 2021 7:57:00 AM

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The search for new talent can be time consuming and intimidating. As with any company, online job boards like Indeed and Monster are good starting points. There are other resources to supplement these tools, and as a financial advisory firm there are some unique tools you can leverage. Whether you’re looking to recruit experienced advisory professionals, or fresh, new talent, the following are 11 more resources for finding new talent.

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Topics: Multi-Generational Ownership, Organizational Structure, Culture, Tip of the Week, Next Generation, Talent Recruitment, Sustainability, Building Your Team

KPIs. What are Key Performance Indicators, and how do you Leverage them?

Posted by FP Transitions on Nov 29, 2021 7:47:00 AM

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KPIs, or Key Performance Indicators

During a recent webinar hosted by FP Transitions, several attendees had questions about KPIs. Marcus Hagood Director of Equity Management System at FP Transitions, and Mike McKennon, EMS Consultant at FPT, had previously hosted a webinar on KPIs, and many of those key points are featured in the following post.

 Knowing the KPIs

The industry is flush with discussions of KPIs. Surely, you’ve heard the term before, or perhaps seen these indexes described as performance metrics, key variables or key success indicators. At FP Transitions, we use the term Key Performance Indicator; but ultimately, the data these terms convey is the same. KPIs are a unit of measurement leveraged to help you determine where your business is at, where you want to go, and will ultimately provide you with a road map of how you should proceed on your journey.

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Topics: Webcasts, Business Growth, Tip of the Week, Deal Structure, State of the Market, Sustainability, Benchmarking, Valuation & Appraisal, Business Operations

Mid-Year Market Update - Key Insights

Posted by FP Transitions on Aug 9, 2021 3:07:11 PM

Last month our M&A Director James Fisher, JD and CEO Brad Bueermann delivered our 2021 Mid-Year Market Update and explored marketplace activity for the first half of 2021.

We all know that 2020 was a truly unique year on all fronts. The financial services M&A marketplace was no exception (as we discussed back in January).  The effects of 2020 have carried over into 2021 and have impacted transactions in some unexpected ways–and have potentially changed deal term norms from here on out.

Our full Mid-Year Market Update presentation was close to 60 minutes, including a live Q&A session, and covered up-to-date transaction data and trends, realities of today's industry, qualities of successful buyers, and common acquisition misconceptions.

To focus in on some of the most important highlights from the session, Craig Strauser sat down with James Fisher, JD to discuss them further. Watch their chat below.

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Topics: Compensation, Business Growth, Sustainability, Enterprise

Balancing Enterprise Strength and Revenue Strength

Posted by FP Transitions on Jul 30, 2021 3:29:19 PM

Balancing Enterprise Strength and Revenue Strength

Many financial services businesses focus on revenue strength while downplaying–or ignoring–enterprise strength. However, revenue strength and enterprise strength are both critical to the growth and sustainability of a business. When revenue is the sole driver of your value, you’re leaving money on the table and jeopardizing the long-term success of the business.

Since revenue and enterprise strength influence the value of your business in different ways, it's crucial to understand these differences and why balancing the two is so important. While clients, fees, and assets under management (AUM) pay the bills, the absence of a solid business infrastructure will put a company's longevity at risk. Whether you’re determined to create explosive business growth or have a sale–external or internal–on the horizon, knowing how to position your company now can result in a higher return on your efforts and investment for the years to come.

Revenue vs. Enterprise Strength

Revenue strength represents the source, quantity, and quality of your cash flow. This includes your active income generated based on advisory fees, commissions, and other financial planning services. Revenue strength accounts for your team’s compensation and other business expenses. Revenue strength represents the top-line accounting of the business.

It's the value of your book.

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Topics: Business Growth, Revenue Strength, Enterprise Strength, Cash Flow, Sustainability

The Fine Art of Enterprise Consulting

Posted by David Grau Sr., JD on Jul 26, 2021 5:10:17 PM

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FP Transitions conducted most of its work by phone and video conferencing long before the virus made this approach commonplace. So, it is with a great deal of humility, and a little courage, that we admit that even after two decades of honing our craft, we’re still perfecting how to provide consulting solutions in this fashion, to this unique profession.

Providing advice over a phone line or a computer isn’t all that difficult; what’s harder is gathering enough high-quality and relevant information to diagnose the problem or problems and then to provide customized, accurate and practical solutions. To do all that, we’ve had to learn how to listen at a professional level–and we had to design those systems and processes almost from scratch.

The mistake that almost all consultants and coaches in this industry make is to try to get an advisor on board as quickly as possible so that, as information providers, they don’t give away too much up front or spend too long trying to help only to be passed over as the service provider. The process usually comes down to 30 minutes of discussion and then a quick diagnosis that best fits what the consultant or coach has to sell, rather than what the client truly needs.

We don’t do it that way.

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Topics: Compensation, Business Growth, Sustainability, Enterprise

The Case Against Revenue Splits [Article]

Posted by FP Transitions on Oct 28, 2020 6:16:00 AM

With all of the modern tools for practice valuations and equity management solutions available, some financial advisors still choose to use revenue splits, or a revenue-sharing arrangement, as a makeshift succession plan. For a practice owner, this can be a poor and shortsighted business decision for several reasons, including:

  • Unfavorable tax implications.
  • Potential asset and client disputes.
  • Reduced business value.
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Topics: Compensation, Succession Planning, Enterprise Strength, Cash Flow, Sustainability

Identifying Key Successor Traits

Posted by FP Transitions on Oct 21, 2020 6:19:34 PM

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As an owner of a successful financial advisory business, you understand that the team you’ve built is vital to that success. Taking the next step and giving your top talent the opportunity to become owners can increase your growth and ensure that the business will continue to be successful–for generations to come.

Assembling this successor team and committing to a long-term partnership are important and weighty decisions. How will you know who will make a good partner? What traits and behaviors suggest that someone will make a successful owner? Much of that depends on your own values and priorities as the majority owner of your firm.

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Topics: Succession Planning, Next Generation, Sustainability, Building Your Team

Benefits of Synthetic Equity for Next-Generation Professionals

Posted by Stuart Smith, JD on Sep 30, 2020 4:56:11 PM

Benefits of Synthetic Equity for Next-Generation Advisors

The term “synthetic equity” refers to a set of compensation tools that is commonly used to provide key employees some of the economic benefits of ownership without actual stock changing hands. While existing owners may benefit from synthetic equity by capitalizing on employee performance without relinquishing ownership, there are key benefits to next-generation advisors, too.

Reduced Financial Risk

One of the most beneficial aspects of synthetic equity for a next-generation advisor is that it does not require a financial investment in the firm. As a younger professional, you may already be juggling the financial obligations of a new family, a recent home purchase, or student loans, and you may not be interested in taking on the added burden of ownership buy-in–yet.

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Topics: Compensation, Succession Planning, Next Generation, Sustainability, Building Your Team

Remodeling Cash Flow [Article]

Posted by FP Transitions on Sep 10, 2020 10:23:33 AM

There are two ways to make money from a financial services business: wages and profit distributions. But, there are four ways to build wealth from the same model: 

  1. Wages (including bonuses)
  2. Profit distributions
  3. Equity income selling equity
  4. Equity value, or stock appreciation

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Topics: Compensation, Succession Planning, Enterprise Strength, Cash Flow, Sustainability

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