Business Valuation
The first step in creating a succession plan for your business is understanding its value today. This will allow you to protect what you have built while you continue to grow. The valuation of a financial advisory business is focused on client relationships and the future value of the revenue generated from these relationships. It also factors in the overall health of the business and its sustainability beyond you, the owner. When starting a valuation, some of the information you will want to collect and consider are revenue, assets, client demographics, and fixed and variable expenses.
Help in Identifying the Right successor for your business
This step often keeps financial advisors from setting up a succession plan because they can’t find the “Right” successor to take care of their clients and business. Our team of succession planning experts can help you identify what is important to look for in a successor and then help play matchmaker with potential buyers.
Deal Structure
Just as there is not one way to value your business, there is not one way to structure the sale of your business either. Generally, the main components of an Asset Purchase would be a down payment, a promissory note, and a revenue share. However, the right way to structure will depend on the type of business your run, how long you are planning on staying involved
Drafting Succession Plan Legal Agreements
Finding an attorney who understands how to structure the sale and transfer of a financial advisory practice can be difficult. Through our partnership with Osaic Wealth, we can access a Succession Planning department that will help draft your legal documents.
- Continuity Agreement
- Asset Purchase Agreement
- Promissory Note
Business and Client Transition Planning and Assistance
After you have valued your business, identified your successor, determined the deal structure, and papered the agreement, don’t forget that the agreement's success is only as good as implementing the transition plan. Our team helps facilitate the implementation of the plan and transition of clients. This will include evaluating:
- What is needed to transition each client account (positive or negative consent)
- What technology is needed to review the accounts and serve the clients?
- What is needed to transition the revenue from the seller to the buyer?
- Working with the buyer and seller to create a process to ensure the financial obligations of the agreement are met