Before You Sell - Consider This In Your Succession Plan

Over the years, I’ve had the opportunity to work with hundreds of advisors. Everything from business planning, growth strategies and succession planning – I’ve done it.

“If one or more is compromised, it all falls apart.”

As the competition in the industry continues to heat up, I’ve noticed some emerging trends that are catching the attention of advisors as they consider their business growth and succession plan. There have been a few start-up firms in the industry that are looking to acquire and onboard advisor practices on to their closed-end investment management platforms. These firms are acquiring advisor practices at a significant valuation with attractive future monetization agreements that are clearly piquing interest. 

As an advisor, should you beware? 

Read the Fine Print

Let’s consider some things. These organizations are quite small in nature and can lack long-term financial stability. Most times, they are seeking a quick consolidation only to spin off the business to a larger wealth management organization. 

In addition, these firms require the selling advisor to give up or down grade their current licenses and perform limited duties. What’s worse, they even require the clients of the selling advisor to transition their good quality investments (held for years) into new investments that haven’t proven performance. Structures like this challenge the many years of trust and integrity built between an advisor and their clients. 

Additionally, the ultimate business valuation received by the selling advisor is directly linked to the transition of client assets into new investment solutions. If you read the fine print closely there are many conditions that need to be achieved to attain the stated business valuation such as tax treatments, market and redemption risks, advice fee pricing, etc. 

Looking for Choice?

If you’re looking for choice and the ability to grow or succeed your business on your terms, the IPC Pinnacle Program might be for you. It’s open to all advisors, regardless of whether you’re with IPC or not. This program provides advisors with an ability to monetize and de-risk the value of their business today, with the option to either sell and exit the business completely or continue to run the business (in whatever capacity they choose) and be rewarded for new asset growth. 

The IPC Pinnacle Program understands the importance of the relationships you’ve built, the portfolios you’ve managed day-in and day-out for your clients and the work you’ve put in to grow your business. It’s an opportunity for advisors to gain continuity and consistency when it comes to client trust and relationships and keeping existing investments, plus we partner with you to choose a successor advisor. It’s also a great option for advisors who want to gradually exit and stay on, so that continuity, established processes and the client experience are learned and transitioned. 

If the IPC Pinnacle Program sounds like something you want to learn more about, let’s schedule a private one-on-one conversation and discuss how we can help with your succession plan. Feel free to contact me today.