The Wire

September 29, 2016

Building a smooth succession plan

Handing over one’s life’s work is a process at once emotionally taxing and strategically complex.

For advisers running their own registered investment advisers, having a long-term succession plan in place is critical to safeguarding the continued success of both the firm and the clients that they serve.

To ensure a smooth transition, the focus must be on building a valuable business that is attractive for sale and keeping all options open, said three succession experts during a Financial Planning webinar covering best practices for succession planning. Read More

August 8, 2016

First Republic's $70B-plus RIA roll-up loses four top executives as its contract with Luminous team ticks down

For the last eight years, James H. Herbert II has been quietly working to upend at least two bits of RIA conventional wisdom: that RIAs can't be rolled up and that banks can't buy RIAs without belching them back out a few years later.

The CEO and chairman of First Republic Bank has overseen growth of the bank's wealth manager mightily enough by focusing on high-net-worth and ultrahigh-net-worth investors. Read More

July 29, 2016

How to Let Go: Best Practices for Succession Planning

Handing over your life’s work is a process at once emotionally taxing and strategically complex. For advisers running their own RIAs, having a long-term succession plan in place is critical to safeguarding the continued success of both the firm and the clients they serve.

To ensure a smooth transition, the focus must be on building a valuable business that’s attractive for sale and keeping all of your options open, said three succession experts during a Financial Planning webinar covering the best practices for succession planning. Read More

July 13, 2016

5 steps to elevate the next generation

As an independent firm grows, the role of an owner evolves frombeing a player on the team, to leading and managing an organization. Eventually, size and complexity will drive the need for greater professional management to help drive the owner's vision. Firms facing this need have three options: have the owner move into professional management and reduce responsibilities, elevate next generation professional talent from within or hire professional management from outside.

Elevating internal talent may be the optimal path for some advisory firms. For most, it is likely a combination where talented next generation professionals are elevated within the firm, and outside professional management is hired as a compliment. If your firm is in need of a diversified management capability, consider elevating the next generation to create leverage and return for the current founders/owners.

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June 7, 2016

Defining Internal Succession and the Next Generation Owner

News flash ... the advisor population is aging. Anyone in this industry knows this. Industry advocates have consistently called for better succession planning, that which promotes the long-term sustainability of RIA firms. This call must be heeded, and yet time and again, advisory firms are forced to turn to outside buyers or merger partners as a succession solution. And for some, perhaps the right choice is to find a buyer or a larger firm within which they can execute a smooth transition.  But a firm’s options should not exclude one that many advisors prefer – one which requires meticulous planning and execution: the internal succession. 

Planning for the next generation of owners is required for firms that want to remain independent or want increased succession options in the future. However, a lack of execution may result in a lack of confidence with the next generation of professionals within a firm.

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June 3, 2016

How Building a Succession Plan Can Increase Your Firm’s Value

Industry participants have articulated the risks of not having a succession plan for years – lack of continuity for clients, inability for advisors to realize the value of their life’s work, and risk for employees in terms of their long term employment. Surveys tell us that not enough advisors have developed a real succession plan, with most surveys triangulating about two-thirds of advisors without one. Although it is widely accepted that succession planning improves business continuity and protects owner equity, a comprehensive succession plan brings additional benefits. But to develop a truly comprehensive succession plan that maximizes value, advisors need to shift their thinking about what a succession plan really is. Read More

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