According to Fidelity’s 2015 market study the majority of financial advisors don’t have a clear succession plan in place. As a financial advisory book of business broker I have narrowed down the important things what every financial advisor over the age of 55 needs to know about selling their book.
Melissa Shin of Advisor’s Edge magazine wrote the article: ”Choose Wisely” (link: https://is.gd/choosewisely ). Melissa’s article gives valuable advice what financial advisors need to look for when they are looking for a buyer of their books. She argues, with much insight, that there is a lot more than just going for the highest price when it comes to selling your book .
Mark P. Cussen at Investopedia published: “Advisors Falling Short on Succession Planning” (link: https://is.gd/advisorsuccession ). The article reveals that the majority of financial advisors fail to have any kind of succession plan. Advisors need to spend considerable time to select their successors to get the best value for their business and to ensure their clients will be in good hands after their retirement.
The 3 Most Important things for selling your book:
- Do not wait – Finding a good successor is a process and needs considerable time. If you are older than 55-60 it is wise to put a proper succession plan in place.
- Price is not the most important aspect – While, at first, you might think that price is the most important thing finding your book’s buyer, I believe that finding the best fit is the much better approach. After all, if your buyer is not a good fit the retention of your book will be lower and consequently the price what you will actually receive may be substantially lower than the actual purchase price.
- Transition your business to fee-based – Transactional books are typically lower priced than that of fee-based books. If you are running managing a transactional book consider transitioning your book to a fee-based book over the next couple of years and so maximize your potential sale price.
Most Important Things To Know About Selling Your Book
If you are an experienced financial advisor take some time to think deeply about your succession plan. You owe to yourself and your family.
Miklos A. Nagy is a book of business broker, financial advisor, financial analyst and author. He runs his firm financial planning firm Fin-Plan and also a partner of Book Brokers, a Toronto based book of business broker firm. You could contact him at: nagy@bookbrokers.ca .