Discover how to leverage a trusted partnership and professional support to create a long-term succession plan, offering seamless client service and maximum financial security.
Key Takeaways
- Start the Succession Process Early and Commit to the Plan: The advisor’s main regret was procrastinating on the sale, despite receiving advice to move forward. Avoid over-analyzing and start the succession process early to provide a smooth, multi-year transition. Leverage internal resources like consortium leadership to vet potential partners who are already familiar with the firm’s culture and processes.
- Structure the Deal for Long-Term Alignment and Retention: The succession deal was structured with a down payment, a promissory note, and a four-year consulting agreement. Half of the firm’s value is paid out monthly, tied to the trailing 12-month revenue and adjusted annually. This structure incentivizes the selling advisor to remain engaged and actively supports client retention, benefiting both the buyer and seller.
- Communicate Trust and Continuity to Clients: The primary client concern during the transition was the length of the selling advisor’s commitment. The letter required by compliance disclosed the compensation for the sale but focused the messaging on introducing the trusted partner (vetted through a thorough process) and emphasizing the added resources and team capability the merger brings, facilitating high retention.
- Utilize Professional M&A Support to Streamline Paperwork: The partners split the cost of LPL’s M&A Transition Services, which managed the complex paperwork (e.g., entity structure, rep code changes, carrier appointments) for the corporate-to-corporate transfer. This service was invaluable for handling the first-time complexities of the process, saving the advisor time and reducing staff workload.
- Align Teams and Tech Stacks for a Seamless Merger: To maintain continuity, the buyer retained the seller’s operations team member (paid through an ASEP team agreement). The partners are actively working to merge their WealthVision/eMoney planning software and consolidate their CRM and subscription services (like Holistiplan) to create a single, efficient operating system for the combined practice.
About Cindy Skaggs
Cindy Skaggs is a Certified Financial Planner (CFP®) and one of the founding members of Integrated Financial Group. Her career in financial planning began in 2002 after a first career in the computer industry and a master’s degree in personal financial planning. She recently executed a multi-year internal succession plan, selling her practice to David Gaynes, a fellow IFG advisor, and is remaining with the firm for a four-year consulting period to provide a seamless client transition.
