Firm Comes Out With Back-Up Plan For Advisors Who Have Yet To Plan For Succession

Thursday, November 15, 2012 08:04
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Firm Comes Out With Back-Up Plan For Advisors Who Have Yet To Plan For Succession

Tags: Advisor businesses | registered investment advisors | succession planning

Focus Financial Partners LLC is offering a backup plan for advisors who have yet to plan how they will segue their businesses as they retire or if something happens to them before retirement.
 
The firm is offering RIAs a flexible succession planning strategy that enables everything to be set up but gives the advisor full option of when—or whether—to pull the trigger.

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The program targets firms with between $50 million and $300 million in assets. An analysis reveals how prepared a firm is for succession to new owners. Then recommendations are made to make the business better prepared for the transition.
 
For example, if you’ve invested a lot of time and money into proprietary technology, it will not be easy to get that value back out when you sell.
 
Focus Financial doesn’t charge advisors for the service until the firm actually transitions. The advisor chooses a partner at the firm to take over if and when the principals activate the succession plan.
 
The financial terms are laid out in that takeover agreement and advisors have to agree to update their plans each year to ensure the firm remains ready for transition.
 
The agreement can be terminated by either party at any time. The process seems to take a great deal of burden off of advisors who, for whatever reason, have put off such planning.
 
It works as a sort of insurance policy, giving advisors the option for succession but not locking them into executing the plan.

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