'Sell and stay' is
a strategy that can help advisers focus on what they care most about doing in
later years
Aug 6, 2019 @ 10:07 am By Scott Hanson
We financial
advisers are not a young group.
In fact, with an
average age of 49, we're part of one of the oldest workforces of any
profession.
With so many
principals nearing retirement, more's being written about succession planning:
Simply, established advisers need a plan to replace themselves once they
retire, die or become disabled.
There's another
path for advisers that's recently gained a lot of momentum, and that's where
smaller shops merge with larger firms for both growth and a better quality of
life — and all while providing a better experience for the client.
Sometimes called
"sell and stay," this is the process where an adviser sells but
continues working.
Given the right
circumstances, my experience has been that this route offers some attractive
possibilities.
For instance, larger
firms can provide greater autonomy. This might sound counterintuitive, but just
stop and consider all the commitments advisers face on a monthly basis. How
many of those obligations bring passion and personal growth?
If you've been at
this for a couple of decades, my guess is that 80% of what you're doing is rote
and routine and only about 20% really gets your juices flowing.
If you merge your
practice with a larger firm, you can free yourself up from the mundane and do
more of what motivates and inspires you. Maybe that's meeting with your
long-time clients, or maybe it's being involved in M&A and vetting firms
that might also be good future partners, or perhaps it's just being able to
take an extended vacation or sabbatical.
A sabbatical?
The #1 complaint clients have about
their adviser is that he or she is hard to get ahold of. In
fact, a recent study showed that a full 66% of baby boomers said they'd fire
their adviser if he or she didn't promptly return their call.
That means, for the
successful independent adviser, even vacations aren't vacations, anymore.
If you're
independent, once you've grown your firm about as big as it's going to get; the
workload never really decreases.
The firm is maxed
and the responsibilities unyielding. Where do you go from there?
Now, as part of a
larger organization, where there are other people to help pick up the slack,
you can be relieved of almost everything except for what you love and want to
do. And from a client's perspective, where attention and response time are key,
being served by a larger team ensures those needs are met.
Granted, not all
larger organizations get customer service close to right, but a few larger
firms are quite skilled at providing institutional level services while
maintaining the feel of a private office.
Because I've been
running a firm for almost three decades, I've become a student of succession
planning. And, I've discovered that, while almost every adviser realizes they
need a succession plan, not nearly enough of us understand that merging with
the right type of larger firm could provide you with the best succession plan
of all.
Scott Hanson is
co-founder of Allworth Financial, formerly Hanson
McClain Advisors, a fee-based RIA with over $4 billion in AUM.
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