The prospect of having to one day exit your advisor business is not an “if” question, it’s a “when.” Developing an exit strategy that helps you preserve the value you have built into your business takes time and planning.
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Most advisors fail to plan for this transition
, whether they are an RIA, at a wirehouse, or a broker-dealer. The average age of advisors in the industry today is 49. Fourteen percent of advisors are over age 60. Many are of the baby boomer generation and seem to think they will live forever. Planning their retirement or a business transition has not been of prime importance.
But obtaining a maximum price for your business depends on good strategic planning. It also is planning that needs to start early. Addressing issues such as who to transition to, putting an effective management team in place to preserve value, and systematizing processes such as client service, compliance, and reporting will go a long way toward making the transition a smooth one and returning maximum value to you.