It's no secret that successful independent financial advisors are control freaks. The draw toward independence in our industry starts with the appeal of being the boss. As Michael Gerber explains in The E-Myth, most small businesses are started by a technician: the person with the technical expertise to succeed in their given industry. And on this front, financial advisors are no different than other small business owners.

The challenge comes when attempting to package the business for sale -- only to realize that the value is found within the skill of the technician. You're trying to sell a business, not your own work -- because, after all, the idea is to eventually stop working. For a financial advisory practice to grow into a business, however, the technician needs to grow into a manager and an entrepreneur.

As an industry, we are failing to take the steps necessary to transition financial services practices effectively. One primary reason why advisors have not established a succession plan is that they lack the ability to release control.

Even if you think you're ready to find a successor, make sure you've taken these three steps to pull back and prepare for a sale.


The first step towards releasing control over what you've built -- and, in turn, commanding a higher value -- is to take yourself out of it. Step outside of your day-to-day business and look at it through the lens of buyers. What are they buying? Keep in mind that you cannot be a long-term part of the equation.

The more systems, processes, and controls you have put in place, the better. Can you restructure parts of an office visit in such a way that another advisor could step in and perform the technical aspects of the role without affecting the overall client experience?

Now take that same approach and apply it to all aspects of your firm: client communications, the investment process, etc. Think about this like making burgers: You need to have a spelled-out, repeatable process that your staff can handle. Once this is mastered, you will own a better business that is more attractive to potential buyers.


Stepping out of the limelight can be a shock to advisors whose identities are tied to their businesses. Remember, you are going to change from “top producer” to “non-producer” status in a matter of weeks. How will you feel the first time you call into the home office and don't get recognized? Some advisors take it as a serious blow to their ego.

So before you even start entertaining a potential sales opportunity, do some soul-searching. Turn your skills as a financial advisor inward; allow yourself to visualize what life will be like five, 10 and 15 years from today.

How active would you and your spouse like to be? What are your dreams and goals for your retirement years? You must be prepared to fill your time with something other than your current typical business schedule.

There's another aspect to consider: the well-being of your clients and your staff. Many RIA firms and broker-dealers are forced to deal with advisors showing signs of diminished capacity. Preparing your own exit allows you to control the process, however. If you truly care about your clients and employees, you will ensure that action is taken on your terms, not by your broker-dealer out of regulatory obligation.


As a new owner (or even a planned successor) starts to take over, it will pay to keep in mind that what worked in the past may not be the best for your company's future. Part of the process of relinquishing control is accepting that it's OK for your successor you to do things a bit differently.

Remember that there is a reason buyers are in front of you with a purchase offer. Rather than getting distracted by different business habits and practices, focus on whether you and your buyer have personalities and cultures that mesh.

Are you confident that your clients and employees will continue to receive a standard of care acceptable to you? That's what should matter most.

An old proverb says that the best time to plant a tree was 20 years ago -- but that the second-best time is today. This is a great time to take a moment, step away from your desk and view your practice through the lens of a buyer.

By establishing systems and processes, you can continue the legacy you established throughout years of independence. And by planning your time after the sale, you can give yourself the confidence to release control.

Jason Card is vice president of advisor solutions for J.W. Cole Financial.

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