Internal Succession Resources
Compensation systems in the industry are as varied as the businesses that use them. Balanced compensation tools help to maximize profitability, reward your team, and attract talented professionals.This webinar explores common compensation challenges and the varied solution sets to address them, including the incorporation of team-based compensation systems as well as synthetic and straight equity solutions. Aired June 30, 2021Compensation | Next-Gen Talent | Business Growth
Building a diverse and complementary team creates business sustainability. Developing a strategy for recruiting, retaining, and rewarding top talent comes from understanding what areas of your business you want to enhance. Create a team that will elevate your business and leverage the compensation tools you have to keep it all growing. Aired May 19, 2021
The concepts of succession and sustainability are inextricably linked–by creating one you find the other. Both are achieved by cultivating strong business foundations. This webinar explores structure vs. size in terms of value impact, defining core pillars of strength, using sustainability to uphold client trust, and focusing your efforts to elevate your business. Aired April 28, 2021
Understanding available compensation strategies and how they work together can help you can build and retain the right team for business longevity and growth. It's critical to balance role-based wages, performance-based bonuses, and equity-based profit distributions for all members of them–including owners–to encourage performance and create profit. What you pay someone is not as important as how you pay them. Aired February 2, 2021
In a multi-generational business, ensuring everyone is aligned in their priorities and expectations will limit disruption as you implement business enhancements and strategic growth. Misalignment, on the other hand, can quickly destroy your growth plans, including succession planning, expanding service offerings, business foundation enhancement, and acquisition opportunities.Next-Gen Resources
As a next-generation professional with career sights set on ownership, you need to tap into your tenacity and communication skills to ensure a successful journey. There are certain situations that can turn into roadblocks unless you keep your eyes and ears open. These can be managed as mere bumps through forethought, transparency, and adaptability.
Look beyond any one owner’s career and focus on the creation of long-term, sustainable independence for the business as a whole. Discover core business foundations needed to support internal succession and long-term sustainability. Where will you focus your efforts to make the greatest impact on the growth and profitability of your business? Aired November 19, 2020
A strategically cultivated and nurtured team can align business goals, spark exponential growth, and solidify client confidence. This presentation explores important considerations for building your recruitment strategy, dates and resources for executing your search, and common recruitment and retention tools for bringing on new professionals. Aired October 22, 2020
Assembling a talented succession 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 suggest that someone will make a successful owner? Much of that depends on your own values and priorities, but there are a few key indicators that are prevalent in the teams we've worked with.
Guidance for next-generation talent for breaking through common succession reservations and helping their businesses get started with internal succession. By preparing yourself for the role, educating yourself on the process, and initiating the conversation you can help your business take important steps towards securing sustainability while reaping the rewards of ownership in a growing enterprise. Originally aired Sept 16, 2020.
A sustainable business is financially strong, has a long-term plan for continued growth, and is structured to last beyond the career of any one owner. Sustainability is about more than just the succession of ownership, it's about creating a business of trusted advisors that will carry on, continue to grow, and, most importantly, be there for clients when they need it most.
Synthetic equity can enhance your ability to recruit, reward, and retain talented advisors and support staff, and offers key economic benefits of ownership, without actual stock changing hands. It is an innovative set of tools that should be considered by every independent financial professional–especially in challenging times. Originally aired April 28, 2020.
The financial obligation of purchasing ownership in the business can enhance an already strong sense of duty to the organization and can pull the bigger picture into focus. As an owner you're no longer responsible for just the projects on your own desk, but for the performance and success of the business as a whole.
In today’s marketplace, many sellers are looking for a flexible offramp that allows them to realize value while continuing to work and earn income. Buyers are concerned about effectively servicing acquired clients and finding talent. The Sell and Stay® model is a powerful strategy to align the interests of both buyers and sellers. Originally aired May 5, 2020.
One of the key hurdles to completing internal succession is financing the transition. As a next-gen advisor seeking ownership, understand how the alignment of compensation creates profit will allow you to leverage the equity to finance your buy-in. Educate yourself on the process to facilitate your founder's progress and to be a part of creating a financial structure that supports the vision and future of the business.
As a talented, next-generation professional in a growing firm it is important to understand how synthetic equity vs. actual equity buy-in can benefit you as you make decisions about your career path. Synthetic can temper financial risk, help you maintain control and flexibility, and open access to ownership-like benefits for non-licensed team members.
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 from sale of ownership stake; and 4) Equity value, or stock appreciation. Properly structuring cash flow and compensation are key to maximizing profit, encouraging business growth, and creating sustainability.
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.Revenue splits encourage the eat-what-you-kill strategy and drive an individual’s book of business rather than support the practice as a whole.
Leverage what makes your practice unique to attract and retain next-generation talent. In a competitive marketplace, developing and executing a clear recruitment and retention strategy to build the right team may be the most important investment you make to grow your business. Through the 3Rs–recruit, reward, and retain–you can successfully build a next-gen team that will help transform your business into a sustainable enterprise.
The success of any small business depends on its ability to recruit, reward, and retain talented advisors and support staff. Equity is often used in addition to–or in conjunction with–compensation to achieve these goals. Synthetic equity is a tool set that can provide ownership-level benefits without buying or selling actual stock in an advisory business.
As industry leaders in designing and facilitating internal succession plans for financial advisory firms, the leadership team at FP Transitions has its own talented, multigenerational ownership team in place. Our next-generation leaders have unique strengths and perspectives that keep our business constantly innovating and growing. In this video, our next-gen ownership team shares their advice for new and prospective next-generation owners.
The separation between wages for work, performance incentives, and return on investment needs to be clear. The delineation is critical more a number of important reasons, including the ability to predict expenses, increase value, and create investability. Equity is a powerful compensation tool to attract, retain, and reward talent. It must be used with measured precision to achieve appropriate long-term results.
Today’s independent financial advisors face a daunting array of opportunities (and challenges). The key to harnessing ownership opportunities is to identify impediments before they arise and develop strategies for tackling the issues that present the greatest opportunities for improvement and growth. Discover actionable guidance for seizing ownership opportunities and facing challenges head on.
Balancing growth and profitability comes down to compensation structure and the equity pathways created. The profits generated through properly structured equity pathways are a catalyst for growth and the means to accomplish long-term strategic objectives including recruiting new talent, internal succession, and acquisition.
A large percentage of advisory practices have built in “fracture lines” by using a revenue-sharing arrangement to compensate multiple professionals in one office. In the independent sector your focus should be on creating a team of advisors that work together—compensated for contributing to an supporting a single enterprise—rather than individuals building their own books and leaving the practice with the clients and cash flow they’ve generated.
Inevitability. Responsibility. Commitment.
You owe it to your clients to build something concrete that will last through the time of their needs, not just the span of your career. This video shows you why you should create a strategy that will support a multi-generational business. It's the middle ground between selling your business, or letting it die.
When it comes to securing your legacy and choosing your successor, instead of looking for an entrepreneur like yourself, shift your search to intrapreneurs. Intrapreneurs are more likely to wear one or two specialized hats. They can see the "big picture" and demonstrate an ownership mentality. They are focused on driving improvement within a company rather than starting up a new one.
A "Lifestyle Succession Plan" is an internal transition that reflects the way most advisors work, live, and eventually retire. The idea is to set up a gradual transition from one generation of owners to the next. This plan reflects the values and needs of the founders while building an enduring business.
Many advisors begin the planning process too late, and their practice begins to lose value drastically as they begin to slow down. In this FP Webcast, President and Founder David Grau Sr., JD addresses how to execute a proper succession plan, from thinking realistically about your time to harnessing second-generation talent.
Our book, Succession Planning for Financial Advisors, written by our President and Founder, David Grau Sr., goes indepth into internal succession planning. It answers the question: How can a formal succession plan perpetuate business growth and income streams beyond an owner's lifetime
Choosing a successor who is a part of your family doesn’t mean the process becomes 10 times easier. It requires the same careful planning to ensure ownership of the business ends up in the right hands. Tom and Paul Morrone have always been a close father / son unit, but that didn’t mean that Paul wouldautomatically take over one day. Tom instisted that Paul earn his ownership.
FPT experts discuss the process of going from next-gen advisor to next-gen owner. They discuss the importance of tapping into individual talents to create a stronger business, as well as the importance of clear communication between generations for a successful integration.
When should you start developing your internal or external exit plan? The short answer is: as soon as you can. Projecting your “workweek trajectory” and exit timeline can help you to determine your planning targets and allow you to make more informed business decisions like investing in various growth strategies, evaluating staff levels, and determining compensation.
The journey of building a business that can outlive its founder is exciting, rewarding and, maybe, a little perilous – certainly, there are plenty of unknowns and first time experiences. There are two primary concerns that surface above all others. This article addresses these issues and how to handle them.
Revisiting a thriving successor team six years later to check in on their accomplishments and the future growth they’ve set their sights on. Empowering a successor team that YOU trust fuels their drive to accomplish incredible growth, elevate the business, and carry a legacy beyond the foreseeable future.
This Roundtable Talk explores the internal succession and describes how both the succession process and business growth can benefit from multigenerational experiences and knowledge from all owners. Additionally, we look at other factors that help the succession planning process, including helping next generation advisors understand the benefits and responsibilities of ownership.
Next-generation advisors are in a unique position to leverage their generational experiences and opportunities that influence business value to carve out their ideal career path. The demand for next-generation talent continues to increase as longevity, continuity, and staying competitive become top priorities for many financial advisor-owners.
A buy-out loan can accelerate your exit plan, while a partial buy-in loan can facilitate your staged-succession. Both are designed specifically for financial advisor to reduce risk by moving the financing responsibility from seller to bank.
There are many exit options and a variety of ways to execute them. Your unique situation and goals will determine which one is right for you. This post describes exit options, the situations each is most suited for, and how to plan properly for your chosen strategy to maximize value when you are ready to exit.
EMS Exclusive Resource
Recruiting and developing a skilled team of advisors can be a daunting challenge for the owner of a financial advisory practice. Doing that, however, is only half the battle. Once you’ve chosen and trained your next generation how do you hold on to them? How do you keep them from opening up shop across the street? Create an ownership track and make the opportunity available to the best on your team.
Unexpected circumstances forced Floyd to quickly reduce his work hours at his firm, Cornerstone Wealth, from 45 to 20 hrs a week. Too young to retire, Floyd incorporated existing staff into the ownership structure to ensure his business not only survived, but thrived. In this client success story the team discusses the transition and their new ownership mentality.
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It may be tempting to think that simply granting stock or ownership to a key employee would be an easy way to achieve succession. But the tax implications and potential issues this causes should be carefully considered.
with guest Colleen Jordan Hallinan, Qii Consulting
In this second Roundtable Talk with Colleen Jordan Hallinan of Qii Consulting, she shares ways to identify different personality types and work styles. Harnessing each individual's unique strengths creates a team that promotes the success of the business as a whole.
Independent financial advisors face an almost overwhelming set of challenges, but with challenges come opportunities. These opportunities and challenges are often interconnected and fall into areas of mergers & acquisitions, growth & profitability, talent retention, and succession planning.
This worksheet will help you clarify and plot your own workweek trajectory and exit timeline. Forecasting your workweek trajectory and exit timeline can help you to determine your planning targets and allow you to make more informed business decisions like investing in various growth strategies, evaluating staff levels, and determining compensation.
Greg Hoffman found the best match for his business when he added Ross Lawrence to his team. Ross shared Greg’s commitment to the community and the people of Nevada, MO. Three years later they embarked on their succession planning journey with FP Transitions. Valuation in hand and succession options laid out, Ross and Greg chose the accelerated path with the help of bank financing.
Michael Lutz understood that acquisition was a viable and smart path for growing his business. He wasn’t just looking to gobble up as many practices as he could, however. He also understood that if he chose his targets strategically, he could not only grow his business, but he could ensure its legacy by pairing acquisition with succession as a vehicle to recruit and retain Generation Two talent to his firm.
Broaching the subject of ownership is a growing concern for young advisors, but it’s also an intimidating one. The ask is a big one, and it requires preparation. A young advisor should come to the conversation with clear achievements and goals that align with the business. This post explores the dilemma of asking for ownership and offers practical advice on how to accomplish the task and be more confident in the ask.
Building a sustainable business and incorporating new talent into your ownership structure is a process that takes planning and monitoring. With so many moving parts including multiple parties and expectations, the process is bound to see some bumps. A course correction can come in the form of accelerating your plan, incorporating more owners, or, in some cases, falling back to Plan B. This post focuses on how to prepare for these situations and how to change course quickly, if needed, to preserve realized business value.
Ownership allows you the freedom to create your own work environment, shape client experiences, and enjoy financial rewards. As with any small business, however, there are ownership rights and obligations that should be considered and understood. This post explores important aspects of being part of an ownership team. It explores key areas such as decision making, transparency, finances, and investment in the context of both benefit and responsibility.
As a next-generation advisor, before you ask for ownership from the existing owners of your firm, you need to demonstrate that it is not only something you are capable of, but something you have earned. There are four critical steps to take in your early career to jumpstart your path to ownership.
Elite Client Consultant Kem Taylor, CBEC, and President David Grau Sr., JD, discuss the many paths succession plans can take as well as offer several examples of how business owners are navigating their plan adjustments including accelerating the plan, adjusting the next-generation ownership team, and falling back to “Plan B”–selling the business externally.
The next-generation ownership of FP Transitions discuss their own experiences in taking the mantle to shape the team and future of the business. They explore hiring for cultural fit and potential value, the definition of “ownership mentality,” and how they might identify potential G3 leaders in the generation beyond their own.
FPT Elite Client Consultant Kem Taylor shares her thoughts on Caleb Brown’s Book Successful Hiring for Financial Planners: The Human Capital Advantage. She highlights the most impactful sections and how advisor/owners can best utilize Caleb’s advice to grow their own staff, and with it, the business as a whole.
A working capital loan can be used to boost business growth as you prepare your strategy whether it includes acquisition, internal succession, or otherwise. These loans are specifically designed with financial advisory businesses in mind with terms made it easier for long term growth.
Building your business the right way is an important element to ensuring sustainability. Unfortunately, there are key elements many business owners forget to take into consideration – including compensation structure, equity pathways, cash flow, and entity set-up.
with guest Colleen Jordan Hallinan, Qii Consulting
In this first in a series of special Roundtable Talks, Colleen talks about her own journey to life after advising, and how finding the right people to take over the business made all the difference.
Advisors commonly think of a merger as the statutory combination of two entities, but it’s better to think of the merger process as the combination of two or more advisors’ strengths, client bases, and cash flow streams. The transactions boost productivity and create tax benefits while reducing or eliminating weaknesses and inefficiencies. A merger can facilitate many growth and business goals including: integrating internal succession, facilitating acquisition, and expanding reach.
with guest Colleen Jordan Hallinan, Qii Consulting
In the last of our Roundtable Talks with Colleen, she shares the philosophies and process for her "after advising" enterprise: helping other advisors build stronger teams for greater success. She walks through some of the assessments and strategies that serve the core of her methodology.
Enterprise Consulting is an end-to-end business growth solution. It is designed to adapt to your needs, your timeframe, and your goals to provide an effective and cost-efficient solution. It is a unique approach designed for a unique profession.
A breakdown of the three phases of our Succession Management Program: Design & Development; Documentation & Implementation; plus Support & Maintenance.
Whether you're considering selling your business externally to the best qualified buyer, or internally to a team of proven successors, bank financing solutions can provide powerful tools to reshape or accelerate your plans.
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Too many advisors focus on revenue strength as the sole measure of their success, but creating and building enterprise strength is just as important for growing value. Maximizing enterprise strength depends on the selection of the proper entity for your business, the proper organizational structure within that entity, and the proper compensation structure for the cash flow of that organization.
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Family businesses have a unique set of challenges, the best way to turn these hurdles into advantages is through preparation, proper structures, and ultimately keeping the interests of the business and the clients top of mind when choosing the next leader of your business.
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When drawing up the plans and documents for your Lifestyle Succession Plan unique deal structuring applies. By its nature this type of succession plan requires you to consider increment amounts for ownership transfer, what each increment is worth, and a set time table for reassessing, adjusting, and continuing the plan.
Succession Management Exclusive Resource
Minority and Marketability Discounts apply to shares of privately owned companies. Both are used in the purchase and transfer of shares that do not hold full ownership rights or value. These shares are awarded/sold in various situations and include those that represent a minority equity share that is not entitled to the same voting rights that majority ownership shares do, as well as shares that cannot be easily sold on the open market due to restrictions in place by the firm.
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A Self-Canceling Installment Note has the advantages of both private annity and installment sales. They are used to transfer ownership stake to your heirs at no gift, estate, or inheritance tax cost while retaining a stream of income for yourself over a set period of time. This short resource covers the advantages of a SCIN in certain situations and how it works once in place.