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There Are No Called Balls or Strikes with Succession Opportunities

By David RichmanManaging Director, Advisor Institute

Recent consults on the topic of succession have highlighted a shift reflecting the demographics of our industry. Mid-career advisors are now in the driver's seat with increasing numbers of older advisors looking for successors.

If you're one of these mid-career advisors being approached with a succession opportunity, pause and consider whether it's a mutual fit before getting swept up in the excitement. You deserve to exercise careful consideration of the opportunity given you already have a successful practice.

This scenario reminds me of the adage: "Investing is a game with no called balls or strikes." The same is true when it comes to deciding whether to join forces with another advisor—you don't have to swing at the first pitch that comes your way. You can and should wait for the optimal fit.

Optimal fit usually comes down to three factors: timeline clarity, financial alignment, and common vision. Here are questions to consider as you assess the opportunity:

Timeline Clarity

  • Is the exiting advisor willing to commit to a specific timeline?
  • Can we agree upon an integration plan, including a specific cadence of transitioning client relationships to me?
  • What is the senior advisor's preferred role in day-to-day practice management?

Financial Alignment

  • What are reasonable splits in revenue sharing in this transition stage?
  • Am I thoughtfully considering my own opportunity costs of this new partnership?

Common Vision

  • What are we hoping to represent in the lives of the clients we serve?
  • What is the consistency of the client experience?
  • How would we hope clients would perceive our team?
  • What are the words we would hope they would use to describe us?
  • Are we going to gel as a galvanized team? If so, how?

Don't force something if the answers to these questions don't feel right. Trust your gut. Take comfort in knowing another pitch will likely come across the plate.

Bottom Line: As a mid-career advisor with a succession opportunity, it pays to wait for the right one. This will be a major decision in your life.