• Home: Leading Financial Advisor Recruiting Firm
  • About Us
    • Meet the Team
    • Testimonials
    • Case Studies
    • Representative Deals
  • Services
    • For Financial Advisors
    • For Independent Business Owners
  • FAQs
  • Articles
  • Podcast
    • Industry Update
    • Independence 101 Series
  • In the News
    • Moves in the News
  • Tools for Advisors
    • Advisor Transition Report 2022 – NEW!
    • Merrill Information Hub
    • UBS Information Hub
  • Contact Us
  • Subscribe for Updates

Questions? Call us: 908-879-1002

Contact us...
Diamond Consultants: Financial Advisor Recruiting FirmDiamond Consultants: Financial Advisor Recruiting Firm
  • Home
  • About
    • Meet the Team
      • Mindy Diamond
      • Louis Diamond
      • Howard Diamond
      • Jason Diamond
      • Barbara Herman
      • Deborah Aronson
      • Wendy Leung
      • Cathy Nichols
      • Debbie Wallen
      • Allison Brunwasser
      • Joshua Tomolak
      • Shelley Muzio
      • Caryl Felicetta
      • Donna Riopel
      • Kelly Griffiths
    • Testimonials
    • Case Studies
    • Representative Deals
  • Services
    • For Financial Advisors
    • For Independent Business Owners
      • Sell-Side M&A Advisory
      • Consulting
  • FAQs
  • Articles
    • Subscribe for Updates
  • Podcast
    • Industry Update
    • Independence 101 Series
    • Subscribe for Updates
  • In the News
    • Moves in the News
    • Transition Announcements
  • Tools For Advisors
    • NEW – Diamond Consultants Advisor Transition Report 2022
    • Merrill Information Hub
    • UBS Information Hub
    • Other Tools
    • Subscribe to e-Newsletter

Sunset Presents the Dawn of a New Opportunity for Smaller Firms

Financial Advisors Sunset Program

Sunset Presents the Dawn of a New Opportunity for Smaller Firms

Posted by Mindy Diamond

Advisors in regional, boutique and other smaller firms are left to ride off into the sunset without a map to guide them

“While the wirehouses have solved for succession planning by offering advisors exit strategies allowing them to monetize their life’s work, most smaller firms have yet to put something formal in place.”

— An astute observation recently posted by our own Deborah Aronson on LinkedIn.

Many advisors seated at regionals, boutiques and other smaller firms have been experiencing a painful “Ah-Ha” moment: “I’ve built an amazing business here, and now I want to consider a succession strategy, but my firm isn’t offering any options.”

For sure, these advisors built their businesses in firms where they thrived on a culture that offered greater freedom and flexibility. Yet now they are finding that they’ve hit what’s looking to be an insurmountable wall: Most of these smaller firms offer no clear path to succession. And the advisors are feeling like there may be no other acceptable solution but to abandon ship.

No Principals to Guide Them

It’s fairly clear that firm management who choose to take a laissez-faire approach to advisor succession planning are missing the boat. It says to those advisors who are looking for a formal and structured plan, “You are free to broker a deal with an advisor at our firm and structure it any way you like.”

That seems tone deaf, as most advisors have no idea what their businesses are worth, how a deal should be structured, or how to identify the appropriate successor. Leaving succession planning to chance, in most cases, is as good as not having a plan at all—which flies in the face of the tenets by which any principal focused on sustainable growth runs a business.

Every Sunset is an Opportunity

Advisors on the back nine of their careers may choose to go to another firm, allowing them to move once and monetize twice. And, for those with entrepreneurial DNA, the leap to independence offers the flexibility and freedom to sell the business on the open market, creating true optionality, and ultimately garnering the most competitive bid for it.

The sad part about this is that often the advisor – and his clients – may be best served by staying put. We’ve had the opportunity to counsel many advisors in this very predicament. Happy enough with the culture and overall value propositions of their firms, these folks look forward to working maybe another 5-10 years. But without a next gen partner or other natural successor in place, they feel scared and rudderless.

In reality, the vacuum created by the lack of support in this area from their own firm’s management is being filled by a panoply of options elsewhere: Every brokerage firm in town and every independent firm in the country would love to be the acquirer of that business. Plus, these potential acquirers are offering oodles of money, attractive deal structures, and specific, like-minded, capable and hungry successors.

That said, it’s incumbent upon firms to recognize the challenge – and opportunity – that’s before them. And to do so before advisors see the dawn of a new opportunity elsewhere.

You may also be interested in...

Share
0

About Mindy Diamond

CEO – By counseling advisors on how to ask the right questions and “dig deep”, she helps them look at all of the opportunities available to find the one that allows them to reach their full potential. That is, to best serve their clients and live a life that is in sync with their own beliefs and values. Learn more...

    Subscribe for Updates

    Get updated by email when a new article is added.


    Listen. Here. Now

    Recent News & Articles

    • Financing Independence: A Lender’s Perspective on Breakaway Transitions, M&A and Succession
    • Winners and Losers: The Year that Was in the Wealth Management Recruiting Space
    • Recruiters Reveal Their Secrets On Cultivating A Robust Advisor Pipeline
    • What Really Makes Financial Advisors Happy?
    • The big questions facing SVB advisors and their clients
    Schedule a Complimentary Consultation
    We're available to answer your questions. Contact us

    Connect with us

    Search

    © 2023 · Diamond Financial Consultants, LLC t/a Diamond Consultants. All rights reserved.*

    • Leading Financial Advisor Recruiting Firm:
    • About
    • Services
    • FAQs
    • Articles
    • Podcast
    • News/Media
    • Tools/Resources
    • Contact
    • Our Locations
    • Privacy Policy
    • Site Map