Knowledge and Insight > Plan for the Future

Succession is Not Selling Out

Mary Ann Buchanan, January 2013

Welcome!

Health, happiness and prosperity to you in the New Year! RIA Match is committed to giving you the tools you need for succession and growth in 2013!

The Verbs of Succession and Growth: Succession is not Selling Out

We know well our industry’s demographic trends: 70% of advisors are solo practitioners and most are without a succession plan while the average advisor age is in the mid 50’s. These aging advisors should be preparing to sell as buyers abound.
So why is this not the case?

One reason is the lack of an efficient market but that to is changing as we, RIA Match, and others create opportunities. But equally as important as efficiency is mind set, emotional intelligence.

For the buyers out there: let’s take a minute and look through the lens of the would-be seller.
The would-be seller has invested her entrepreneurial energy, spent her personal funds, and gradually created, over likely decades, a viable practice that defines her.
She feels that the logical word to follow “Sell” is “Out.” She doesn’t want to sell-out on her clients she has worked so hard to cultivate and care for; sell-out on her staff whose families the advisory firm supports and sell-out on the dream that is her own firm.
These core beliefs are the same for advisors from $20 million to $2 billion in AUM. It’s true you know.
Even though intellectually, aging advisors know they need to create an exit strategy and manage their business equity through a well executed succession plan; they are turned off by the thought of the loss of autonomy, identity.

Buyers exercise your emotional intelligence. The succession plan needs to be far more nuanced than an exchange of cash for control. The verbs of succession and growth include merge and partner and still deliver both parties to their goal. The verbs merge and partner offer a level of autonomy to the older advisor and improve the outcome of the merger or partnership for both.

A parting thought for the would-be seller; there is one other verb to discuss: to shutter. Advisors who don’t make an exit plan early enough slowly lose their clients to death or desertion and may be forced to sell or shutter their practice quickly at the cost of leaving potential on the table. This does not have to be; options exist for you.

Before you begin to address your firm's succession or growth, review your mind set, exercise your emotional intelligence. We'll discuss options for sellers in the next post.

Best Practices to Enhance Your User Experience

Match List Tip #3

The best way to narrow your list is. . . The Advanced Filter

1)      You can filter by professional affiliations and, or primary and secondary custodians.
Go to your Match List and note the number of matched profiles in your list. Then click on Advanced Filter. Make your filter selections and select apply filters. Notice the fewer number of profiles appearing in your Match List now. For example, there are 78 profiles in my Match List and I want to see which of my matches are FPA members. So I open the Advanced Filter and select the FPA filter and click Apply Filters. Now My Match List is showing only the matches who also belong to the FPA.
2)      The filters stay on until you go back into the Advanced Filter and reset the filter. If you logout with your selected filters in place, upon logging back in your Match List will still be filtered. To see all your matches again, return to the Advanced Filter, click Reset Filters and then Apply Filters.
3)      Multiple filters produce inclusive outcomes. For example, if I selected The FPA as an affiliation and Fidelity as a Primary Custodian then the Matches showing on My Match List will show matches who are either members of the FPA and/or have Fidelity as their primary custodian.

Match List Tip #4

The best way to initiate contact with an interesting matched profile is. . .

1)      Send an Indication of Interest (IOI) first before you use one of your monthly contacts.
Go to the Toolbox in the profile of interest and click Send an Indication of Interest.
The receiving profile will receive an email update telling her that she has received an Indication of Interest. She will then log into her RIA Match account and see the icon that indicates she has received an indication of interest. She can then click on your profile number to preview your profile. If she is interested, then she can click respond to an indication of interest to you.
2)      Wait for your match to respond to you with an IOI in return before you use a contact.
3)      Then send an email and begin a dialogue.
This way you are using your monthly contacts wisely on those matches who have expressed an interest.

If you are just joining – some things you should know:

The Personal Plan allows you to initiate contact with 5 members each month. You can continue to send each of these members’ unlimited messages. The next month you can continue to communicate with those original 5 members plus initiate contact with 5 other members.
The Premium Plan allows you to initiate contact with 10 members each month. You can continue to send each of these members’ unlimited messages. The next month you can continue to communicate with those original 10 plus initiate contact with 10 other members.
Unused contacts roll forward for 90 days.
If you need more contacts, you can always buy a booster pack in the RIA Match Store.

Also, we want to continue to improve the user experience. Please share ideas about what you like, and how to improve, in the comments section of the post. We’d love to read what you think.

Statistics on your matching pool as of 1/10/13: