When an advisory firm transitions to a new owner, it is important to preserve the core values of the practice.

To address these challenges, Financial Planning turned to Robert Goff, vice president of succession and acquisition consulting at Raymond James of St. Petersburg, Florida, whose team has helped many advisers with the benefits of transitioning to the next generation.

Below are excerpts from the interview.


Q: Identify the risks and common goals, potential conflicts and how to resolve them in such a transition.

A: Communication can present a challenge with family teams. It is important for family teams to refine their communication style for the workplace. This can sometimes prove difficult. How they communicate at home is very different than it should be in the work environment. Role acknowledgement and acceptance can present an issue in some cases as well, all parties understanding their specific role on the team and when those roles need to be adjusted, given the growth and evolution of the team.

Acknowledging that each generation works differently is important for family teams, particularly for the aging adviser. The younger generation should bring their personality into the practice to build upon the foundation created by the parent.


Q: How does one evaluate whether the successor has the necessary skills and passions to take over the business?

A: This can prove to be a large challenge, both from the legacy adviser’s perspective, who may want their son/daughter to take over the practice while being realistic about their skill set and ability to handle the practice as well as their ability to maintain or grow the culture of the practice.

The adviser should use their current broker-dealer to help determine the training gaps, using inside or outside consultants to review the team dynamics and roles on the team, and by using career assessment and aptitude tests to help narrow down their child’s skill set. And of course, talking to their child about their desires, career goals, fears and concerns to get a well-rounded prediction on their future success in the industry should constantly take place at every stage.


Q: Why does training play so important a role? In other words, why is it a systematic process, not a one-off incident?

A: Training and development is key to setting them up for future success but is only part of the equation. Advisers who have been in the industry 20 or 30 years have experienced market ups and downs as well as recessions and times of prosperity. Sharing those experiences is critical to ensure the same values, work ethic, service model and client touchpoints and interaction survive the transfer of ownership.

Q: What should a good succession plan that preserves the core values of the parent firm include?

A: First, the transfer of ownership and establishment of roles on the team should be discussed initially and ongoing as the team develops. There is no better substitute to head off and deal with conflict than quality communication. This is especially true in family teams.

All teams should have a team agreement on file, clearly delineating ownership, the future transition of control in the book and a timeline that fits with the needs and desires of both retiring adviser and successor adviser. Family teams have an added dynamic and can run the risk of falling into home/family roles, as opposed to work roles. It is important for all parties to agree at the outset to leave home at home and work at work. Otherwise, the quality of the work environment could suffer, and family gatherings could get uncomfortable.

This is part of a 30-30 series on smarter succession planning.

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access

Bruce W. Fraser

Bruce W. Fraser

Bruce W. Fraser is a financial writer in New York. He is writing a book about the ultrawealthy.