Succession Planning for Financial Advisors: Building an Enduring Business + Website

Praise for Succession Planning for Financial Advisors At long last, a comprehensive, fact–based, and deeply insightful guide to overcoming excuses and giving all that is needed to build an enduring business. David Grau Sr. and the FP Transitions Team give a compelling account of a critical topic at a time that has never been more important, nor the need greater. The very essence of the independent advisor business is on the line. Clients, staff, and family members deserve a thoughtful approach and plan to ensure that their needs will be met and the true value of a life dedicated to helping others is celebrated through a long–lasting legacy of continuing to provide much needed independent advice. Robert J. Moore, President, LPL Financial What is my practice worth? And how do I best recognize that value? Two straightforward questions with complex and nuanced answers. Nobody addresses those questions and answers better than David Grau Sr. and FP Transitions. This book will become the canon in the independent financial services industry on succession planning for years to come. In this book, Grau sets aside the myths and so–called common sense approaches, and focuses the business owner on what is truly important in developing a real succession plan. Kirk J. Hulett, Executive Vice President, Strategy and Practice Management, Securities America, Inc. Most financial advisors are deeply committed to their family, clients and employees, yet they put them at risk by not having a succession plan in place for their business. David Grau Sr. and the FP Transitions Team address this growing gap with Succession Planning for Financial Advisors a wakeup call, a call to action, and much more. Graus astute and practical guidance will help advisors create and implement plans to secure the future of those who count on themall while transforming their one–generational practice into an enduring business. Valerie Brown, CEO, Cetera Financial Group David Grau Sr. and the FP Transitions Team accurately capture the industrys dilemma while providing innovative outside of the box solutions to the problem. A must read for any advisor at any stage of their career. Outstanding! B. Heapps, CLU, ChFC, President, John Hancock Financial Network (JHFN), Signator Investors, Inc. This book comes at an extremely important time in the history of the financial services industry as it approaches the potential loss of enormous intellectual capital possessed by the independent advisors of this country. Young professionals entering the industry are eager to find a vibrant organization requiring their dedication and talent as they progress towards a path to ownership. FP Transitions secret formula provides such a path. John Gilliam, PhD, CFP, CLU, Associate Professor and Director of MS Programs, Texas Tech University While passion is the catalyst for becoming an independent advisor, David and the FP Transitions Team offer the first practical guide to creating and monetizing real equity value as a business. In an industry where so much has changed, this book exposes the outdated assumptions of a by–gone era, arms you with the facts, and forges a clear path for achieving sustainable success for the future. Sharon M. Theall, President, Strategic Management Advisors, LLC

Preface Acknowledgments Introduction Chapter One: The Succession Conundrum Practices Built to Die What Exactly is a Succession Plan? Why You Need to Create a Succession Plan Now Your Clients Are Watching You! Why this Industry Struggles with this Concept The Evolution of the Solution Mind Your Own Business The Opportunity at Hand Chapter Two: How to Start Creating Your Succession Plan Defining Your Goals Building a Foundation for Success Facing Your Biggest Challenges Equity – A Powerful Business Building Tool Valuing a Financial Services Practice Practicing Equity Management Building Profit–Driven Businesses Chapter Three: Transforming your Practice into a Business Assessing What You Have Built A Building Problem, Not a Planning Problem A Parable Building Your Ship Rethinking Your Compensation System Balancing Revenue Strength & Enterprise Strength Selecting the Right Entity Structure Remodeling Your Cash Flow Production Model vs. Business Model Chapter Four: Creating Your Succession Team The People Problem The Secret Formula: G–1 + G–2 + G–3 Plan Before You Build and Hire Mining the Talent Pool Turning Employees into Equity Partners Onboarding Talent with a “Book of Business” Help Wanted Ad Solving the Talent Crisis in this Industry Chapter Five: The First Step – A Continuity Plan A Dress–Rehearsal for Succession Planning What Exactly is a Continuity Plan? Basic Components of a Continuity Plan Types of Agreements Funding Your Continuity Plan Continuity Plan Do’s and Don’ts A Powerful Acquisition Tool Communicating Your Plan Chapter Six: Charting Your Succession Course Exit Strategies vs. Succession Plans Selling Your Practice Mergers What Doesn’t Work in this Industry ESOPs What Does Work?  A Lifestyle Succession Plan Goals of a Lifestyle Succession Plan The Family Business – A Special Case “Yes, but…” (Obstacles to Overcome) Chapter Seven: Succession Planning Step–by–Step Where to Start Assembling Your Support Team Enjoy the Planning Process Doing the Math Establishing a Fair Price The Nuts & Bolts of a Plan Documentation Bank Financing – Expanding Your Options Beware of Benchmarks and Survey Results Chapter Eight: A Tale of Ownership Chapter Nine: Course Corrections Returning to the Harbor Empowering the Next Generation Growth is a Sign that Your Plan is Working What to do When Your Plans Change What to do When Their Plans Change Handling the Culture Shift Conclusion About the Companion Website About the Author Index

DAVID GRAU SR., JD, is the founder and president of FP Transitions, a firm that specializes in building financial services businesses of enduring and transferable value. He has authored over 85 nationally published articles, white papers, and manuals on complex succession strategies, equity management, business continuity, income–perpetuation plans, and mergers and acquisitions. Grau Sr. was named one of the most influential people in the profession in an industry survey by Financial Planning magazine and is a nationally recognized expert on succession planning and business–perpetuation strategies in the financial services industry.