As the new year begins, many are focused on transitions and goals. In the financial industry, while the calendar year often drives planning, continuity and growth should align with a long-term strategic vision. Advisors don’t just set goals like retirement or tax strategies and forget them—they plan, review, and adjust to provide clarity and peace of mind for clients. Succession and acquisition planning for financial practices should follow the same thoughtful approach.
Why Succession and Acquisition Planning Matters
Succession, continuity, or M&A strategies aren’t “set it and forget it” tasks. They require careful planning, execution, and adjustments as circumstances change. A crucial question for advisors is: Would you sell to your own practice? If you were handing over your life’s work, would your practice be ready to handle the responsibility? Considerations like staffing, experience, technology, and smooth client transitions are key.
Preparing to acquire or be acquired requires the same diligence and responsibility as managing a client’s financial future.
Where to Begin
Charles Schwab’s M&A framework—Envision, Prepare, Connect—provides a roadmap for both buyers and sellers to approach succession planning effectively. Here’s a quick breakdown:
Phase 1: Envision – Define Your Vision
Ensure your M&A activity aligns with your values and goals. This phase keeps your team focused when deciding how to allocate resources or walk away from opportunities that don’t fit.
- Establish Your Strategic Vision
- Define what you’re working toward: expanding expertise, entering new markets, or enhancing services.
- Plan for future capacity, including staff and technology needs.
- Develop Your Ideal Partner Profile
- Identify the qualities you seek in a buyer or seller.
- Create a “practice profile” to showcase your strengths, values, and client approach.
- Example:
- Buyer Vision Statement: “We aim to acquire a young, fast-growing firm to expand into niche markets like high-net-worth millennial entrepreneurs, accelerating our goal of reaching $2 billion in AUM.”
- Seller Vision Statement: “Selling to a firm with broader offerings will provide our clients with better resources and allow our team to grow while facilitating our founders’ retirement.”
- Define Your M&A Value Proposition
- Highlight what makes your practice unique and valuable in the marketplace.
Phase 2: Prepare – Get Your House in Order
Preparation involves evaluating your practice’s readiness, from valuation and financing to internal processes and documentation. (Details will follow in the next article.)
Phase 3: Connect – Build Relationships
Identify resources and establish communication strategies to create meaningful connections with potential buyers or sellers. (Details to come in a future article.)
Take Action
Use this framework to start a team discussion or consult with a strategic partner. Preparing for succession or acquisition is as critical as managing client portfolios. For personalized guidance, reach out to Jake Saba.
Source: Activating Your M&A Strategy: A Comprehensive Action Guide, Charles Schwab Advisor Services
Learn more at advisorservices.schwab.com/guidingprinciples.
