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 focuses on client relationships and the future value of the revenue they generate. It also factors in the overall health of your business and its sustainability beyond you, the owner. When starting a valuation, you will want to collect and consider information such as current revenue, assets, client demographics, and fixed and variable expenses. Contact us to discuss how you might receive a complimentary initial valuation.
Identifying the Right Successor
This critical step often keeps financial advisors from putting a succession plan in place 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 to look for in a successor and then act as a matchmaker with potential buyers.
Contact us to receive a free copy of our “Buyer Due Diligence Checklist” (highlighting what a buyer should be looking for in their prospective seller) and “Seller Due Diligence Checklist” (highlighting necessary credible buyer attributes such as having a clean record, being the right fit for clients, and having the financial resources to support the deal terms).
Deal Structure
Just as there is not one way to value your business, there is not one way to structure its sale, 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 it will depend on the type of business you run, how long (or if) you plan to stay involved, and the timeframe in which you want it all to happen.
Succession Planning Documents
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 have access to a Succession Planning department that will help draft these legal documents for you:
- Continuity Agreement
- Asset Purchase Agreement
- Promissory Note
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 the implementation of the transition plan! Our team helps facilitate the implementation of the plan, the transition of your clients, and your compensation (or a beneficiary's). This will include:
- 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