Your situation as an independent financial advisor is unique. When you are ready to move on to another career or even retirement, it’s not as simple as giving your notice and packing up your desk. You have grown your business with your own blood, sweat, and tears, and created relationships with your clients, guiding their financial life. Even though you are ready to close the book on this chapter of your life, you still want the best for your clients because of how much you’ve invested in their lives. Is it possible to make a smooth transition that will benefit everyone?
Many advisors who dream of retiring in the near future need to first sell their practice to fund a comfortable retirement. Before you make such a move, there are countless questions that need to be addressed, such as:
- How do I minimize the impact of this transition for my family and my clients?
- What are my roles and responsibilities?
- How much is my business worth, and how can I be sure I will get paid?
- Will my client relationships be handled with the same level of care that I provided?
- What are the risks, and how do I best handle them?
- What resources are available for me to understand my options?
According to a report by the Financial Planning Association, only 27% of all advisors have a formal plan to transition their business. (1) Just like preparing for retirement, preparing your practice for sale is most effective when you start early and rely on a professional to guide you through the process.
How Can I Sell My Practice?
If you have worked for decades to build your practice from nothing, the decision to sell might feel like giving up a child. You aren’t selling a product, you are selling the years of relationships you have invested in. That is why it is critical that you find the right fit with an ideal buyer so you can move into retirement with confidence. You want to be sure your buyer not only has the right qualifications to take care of your clients’ needs, but also shares the same values and goals as you. Your future buyer might do some things differently, but if you can find someone who will treat your clients like family, then you can rest easy, knowing your clients are in good hands.
How Much Do I Sell For?
Once you’ve decided that you’re ready to walk away from your business, you need to figure out how much your business is worth. Since your business is an extension of you and your hard work, it might be hard to put a number on it. That’s why you need a professional valuation that takes multiple considerations into account, such as your client demographics, your historical average growth rate, your firm’s profit margin, economic conditions, among others.
In addition to the above factors, there are specific steps you can take to maximize the value of your firm, including systematizing and documenting your processes, preparing the financials, reducing personal expenses, and increasing your cash reserves.
How Do I Get Started?
You have put your clients first throughout your whole career; now it’s time to continue making them a priority by creating a plan that will take care of them and their money. At Freedom Wealth Alliance, we support you in this process by providing you with the experience and resources to get the answers necessary for your peace of mind. If you are looking for an opportunity to plan the eventual sale of your business for the maximum value or to transition your practice to another advisor, we can help.
At FWA, we have successfully acquired, merged, or aligned with financial advisors of all sizes and experience levels. We start with an initial meeting to see if there is a good fit, looking at everything from your goals for yourself and your clients and your current business structure.
Once we understand what your ideal transition looks like, we examine professional valuation options, set up roles and timelines for each person involved in the transition, complete legal requirements, communicate with clients, and celebrate (we’ll bring the champagne)! The bottom line is this: with Freedom Wealth Alliance, you have a variety of options to fit your personal goals. We have been part of many successful transitions. Let us help you with yours.
Learn more about our firm and how we can help you with the sale of your business by visiting www.explorefreedomwealthalliance.com. You can also email us at firstname.lastname@example.org or call Kurt Rozman at 262-798-7979 and find out your firm’s value by using our online valuation calculator.
About Freedom Wealth Alliance
Freedom Wealth Alliance is a Registered Investment Advisor providing a home and multiple affiliation options for financial advisors seeking business growth and/or succession planning, operational excellence, and turn-key placement. We created this firm to relieve your stress no matter the stage of your firm. We take the burden of running the business off your back, so you can spend your time doing what you do best and love the most. If that means spending more time with clients and prospects, you can. If that means spending more time with your family, just do it. Visit www.explorefreedomwealthalliance.com and sign up for a free account to access all the tools and resources we have developed to help you transition to true freedom and business ownership.