I’ve just begun a three-part series for ThinkAdvisor on selling your practice. According to Cerulli research, 43% of advisors are 55 or older.
Many have no succession plan. As financial advisor recruiters, we speak with advisors like this every day. It occurred to me that they could benefit from a practical discussion of this topic. In order to write this piece, I had lengthy, in-depth conversations with Matt Brinker of United Capital and Mark Penske of United Advisors. Both have extensive experience in the purchases and sales of advisory firms. They were both very generous in sharing their knowledge and time with me and I thank them very much.
The next article will be about what sellers should keep in mind when they structure deals to sell their practices. In the final piece , I’ll interview advisors who’ve sold their practices or firms to find out what they learned from their experiences.
Here’s the start to the first article:
Choosing a buyer for your advisory practice should be a piece of cake. The number of buyers vastly outnumbers that of sellers, so you should simply sell to the highest bidder, right?
In most cases, that would be a costly and irreversible blunder, because much of the value of the deal comes in back-end payments. Thus, advisors need to do the due diligence to be sure that a potential buyer can live up to his or her promises. Once an advisor sells a firm or practice, there are no “do-overs.” You have to get it right the first time, because your retirement nest egg is riding on it.