Build, Grow, and Transact: Lessons from Advisors Turned Business Owners

Build: Own a Business, Not a Book

The first shift is the hardest, and it’s a mental one. You stop thinking of what you have as “my book” and start thinking of it as “my business.”

Patrick Larkin described the exact day it happened. When Oak Hill opened, the business effectively had an IPO. Overnight, a book worth one number inside a wirehouse succession plan became an enterprise worth several times that. Nothing about the clients changed, only how he thought about the asset.

And you don’t have to go independent to make that shift. A wirehouse advisor who thinks like an owner, builds a team that can run without them, and institutionalizes relationships rather than hoarding them is building something more durable, whether the eventual buyer is an outside firm or their own next generation.

The other half of building is a willingness to spend. The best builders invest in capacity and A-players ahead of the growth, even when it dents their margin. Fertitta reinvested cash flow into a professional management team and, by his own account, earns less today than he did on Wall Street even as the enterprise he owns has multiplied.

Bahnsen framed the same trade more bluntly: He runs a full in-house tax, planning, and investment team that erodes his margin on purpose, because 20 cents of a much bigger business beats 40 cents of a small one.

Income down, enterprise value up. You have to choose that math. You can’t stumble into it by maximizing this year’s take-home.

Part of choosing it is deciding what to own and what to hand off. Bahnsen’s rule was simple: Do what you’re genuinely good at and care about – for him, investing, branding, and business development – and outsource the rest, from supervision to technology to HR.

It’s the right lens for your own firm or platform, too. Is it helping you build the best version of your business, or have you just gotten good at working around its limits?

Where you are may well be the right place to build. But you should know that because you tested it, not because you never asked.

Grow: Build a Repeatable Engine

Almost every advisor wants to grow. Far fewer have a repeatable way of making it happen that doesn’t depend entirely on them.

That distinction matters to a potential buyer, but it also matters to the advisor building the business. A business that only grows when the founder personally sells is more dependent on that individual than one with an engine that can run without them.

Bahnsen is an extreme example. The Bahnsen Group has grown more than 30% a year and opened 13 offices, not one from an acquisition. The engine was content: a weekly market commentary that now reaches 35,000 subscribers, all organic, feeding a steady flow of prospects to advisors who don’t have to rainmake at their kids’ soccer games.

Most advisors won’t build a media engine, and they don’t have to. But the principle holds: Businesses become more valuable when they institutionalize how new business arrives, whether through a niche, a referral flywheel, or a capability clients can’t get down the street.

Which raises a question worth asking: Are there services your clients want that you can’t offer where you are today?

Sometimes the constraint on growth isn’t effort or talent. It’s the shelf you’re allowed to sell from. For Kilgroe, that shelf was sports and entertainment, a niche full of private investments he couldn’t touch inside a wirehouse without risking his job.

There’s a second growth lever that can matter enormously: inorganic growth. Whether you’ve done an acquisition, absorbed a retiring advisor’s book, or recruited a team, it can accelerate scale in ways organic growth alone cannot.

It’s worth asking whether that’s a lever you’ve pulled—and whether you’re empowered to pull it where you sit.

Transact: Optionality is the Point

This is where advisors can get it backwards.

The whole point of building enterprise value is the optionality it creates. For an independent, that might mean selling a minority stake, merging, recapitalizing, or passing the firm to the next generation.

But optionality matters inside a wirehouse, too. The advisor who has built a genuine business can evaluate an internal succession program like Merrill’s CTP or UBS’s ALFA against other paths. They’re also better positioned to consider recruiting opportunities or, if they ever choose independence, eventually monetize on the open market.

Building enterprise value doesn’t commit you to leaving. It puts you in a better position to evaluate your options rather than simply accepting the one in front of you.

As Larkin put it, ownership isn’t mainly about control. It’s about creating options and putting yourself in a position where the next decision is yours. He sold three years into independence, far sooner than most, precisely because he’d built something that gave him the choice.

And when the time comes, run a thoughtful process, the same way you’d counsel a business-owner client selling their company.

There’s no shortage of capital or interested parties today, which can make a formal process feel unnecessary. But having choices doesn’t necessarily make choosing easier. Finding the partner who fits your goals and offers the right combination of valuation, structure, and strategic fit is what ultimately matters.

Fertitta ran a formal process – 30 firms signed NDAs and roughly 20 made offers – and sold a majority stake to a partner who wasn’t the highest bid, but was the right one.

And the destination doesn’t have to be an outside buyer at all. Selling to your own team, or handing the business to the next generation, counts too, if you’ve built something worth passing on.

The Through-Line

Notice what none of these advisors did: None woke up one day, decided to sell, and dressed up a book of business to look like an enterprise. The value was already there because they’d spent years building it.

That’s the real lesson, and it has almost nothing to do with independence.

Build a business that doesn’t depend on you. Grow it in a way that can repeat without you. Keep your options open. Because independence isn’t the finish line. And neither is a transaction.

The goal is to build something worth owning, with the freedom to decide what you ultimately want to do with it.

As seen on CityWire.com…