You Can Increase the Value of Your Business Before You Retire

As an independent financial advisor nears retirement, one of the biggest questions on their mind is going to be how much their firm is worth. Selling it for the right price can be the difference between their dream retirement and one that’s filled with anxiety about money. Unfortunately, many financial advisors make mistakes towards the end of their career that can result in their business losing value, such as:

• Not transitioning their clients correctly. Whether it’s a new lead advisor or to a new firm when a financial advisor fails to help their clients through the transition they are at risk of losing them altogether.
• Not communicating with clients. Clients are aware that you are going to retire, most likely before they do, and they want to know that there is a plan in place. If there isn’t, they could walk away from your business.
• Focusing all of their attention on selling their business. We discussed it in a previous blog, but putting all of your attention on selling your financial advisor business leaves it vulnerable to decline. It’s one of the primary things that can make clients nervous and move their money.

So what can you do to make sure your business doesn’t just retain its value, but actually increase in value before you retire? It’s all about a succession plan that’s focused on the client’s experience and the convenience for the new owner.

The Importance of a Succession Plan

Succession plans really aren’t an exit strategy. They are a strategy to help your business grow and become worth even more as you start to transition into retirement. Independent advisors with a solid succession plan are much more likely to sell their business for more money. But why is that?

Documentation

When it comes to selling any business, documentation is incredibly important. All those little things that make your business run might come naturally to you after decades of doing it, but could be a mystery to a new owner. Having the right documentation makes your business more valuable because it makes it more of a turn-key operation; all the new owner needs to do it turn the key to unlock the door and get it going. The documentation for a financial advisor business is time-consuming, more so than with most businesses, so working with an experienced team who understands what documentation is needed can help free you up to focus on other areas of your business.

Retention

A good succession plan helps you retain your employees and your current clients. Without it, both of them are much more likely to jump ship and go to a different firm or advisor. That’s the last thing you want to happen before you sell your business. It makes your business look weak and unstable, and not worth the investment to an outside party. You need to do everything that you can to make sure both your team and your clients are happy with your succession plan. When potential buyers see that your clients stay with you for the long haul, they’ll be eager to take on your book.

New Clients

Just because you are retiring is no reason to stop bringing on new clients. In fact, this is the best time to do it. It shows that your business not only keeps your clients around but is actively growing. That’s incredibly appealing to a potential buyer and one of the primary things that can help you sell your business for the most money possible.

We Can Help You Get More For Your Business

Focusing on the client experience is something that’s vital when it comes to selling a financial advisor business, and you know your clients better than anyone. That’s why advisorRETIRE™ works with current owners to help transition the ownership of the firm so there is the lowest possible impact on the client service experience. This contributes to the growth of your business so you can walk away from a healthy, thriving business for the most money possible. If you are interested in learning more about how an advisorRETIRE™ succession & transition plan can help you get more for your business, get in touch with our team today for more information and get started with our succession planning services.