Navigating the future of your practice is a journey filled with critical decisions. Whether you’re considering retirement years down the road, preparing for an imminent transition, thinking of selling your practice, expanding through acquisition, or planning for succession with a next-generation advisor, each path requires careful consideration and expert guidance.
We understand that the choices surrounding mergers, acquisitions, and succession planning are among the most important and complex you’ll face. At every stage of your career—from building your practice to planning your exit strategy-our dedicated team and comprehensive resources are here to support you.
Mergers, Acquisition, and Succession.
What does it all mean?
Mergers
Mergers occur when two financial firms join together. This could be a short-term strategy that leads in to acquisition / succession quickly or it could be a long-term strategy to create economies of scale while combining strengths and resources to enhance valuation, create efficiencies, and deliver a better client experience. Both parties continue to play active roles, but they now operate under a single brand or firm name.
Acquisition
In an acquisition, one company purchases another outright, establishing itself as the new owner. This can be a great option to accelerate growth for advisors that want to expand their practice quickly.
Succession
Succession is the active process by which a financial advisor plans for and executes the transfer of their practice, client relationships, and responsibilities to another advisor or team of advisors. This transition plan ensures continuity of service for clients and preserves the value of the practice. Succession can involve selling the practice, bringing in a partner, or training an internal successor. It is highly advised to begin planning for this at least 3-5 years before you wish to exit to ensure a smooth runway for all parties.
What's the next step on your journey?
Our industry is constantly changing and evolving. Whether you’re looking to grow, transition, or secure your legacy, it’s crucial to understand the different paths available. Let’s break down three common paths that financial advisors must be aware of and consider for the future of their business.
Merger Solutions
Mergers are a strategic move for financial advisors contemplating succession or retirement. They can be a game-changer, offering a strategy that keeps your business growing and setup for long-term success. But let’s face it-- mergers can be messy. That’s where we come in.
- Brand synergy development: We’ll blend the best of both worlds, guiding the integration of the existing brand identities and creating a cohesive brand image that positions the merged firm for future success. Think of it as creating a financial powerhouse brand. Our team works closely with you to develop a unified brand that will continue to resonate with existing clients while also attracting new ones.
- Technology consolidation: Tech integration can make or break a merger. Our goal? Help sync your systems and approach to enhance your team’s efficiency while better serving your clients. This process can vary depending on if the two practices are working for the same financial firm or not.
- Future-focused strategy: We assist in the development of a clear, shared vision for the merged business. Our experienced consultants help you and your team align goals, values, and long-term strategies to create a roadmap for sustainable growth and success.
- Marketing support: Our marketing experts provide comprehensive support to communicate the merger effectively to clients, partners, and the wider market.
- M&A team coaching: A merger’s success hinges on its people. Our professional coaches work with staff at all levels to foster a unified culture and develop the skills necessary to thrive in the new organizational structure.
By leveraging our expertise in these key areas, you can feel empowered to navigate the complexities of a merger with confidence, setting the stage for a successful transition and future growth.
Acquisition Solutions
The decision to acquire another financial advisor’s business is about more than just the numbers. Understanding the real value of a practice involves careful analysis of identifying hidden opportunities and recognizing potential risks ahead of time. The right acquisition can be a launchpad for growth.
Here’s how we help:
- Navigate & support buyer’s journey: Feeling overwhelmed? It can be stressful, but don’t worry - we’ll be your GPS and guide you through every twist and turn of the acquisition process. This begins with identifying the right practice to acquire and continues well beyond the moment the ink dries.
- Timeline development: For an acquisition to be successful for both parties, timing is crucial. We’ll work to create a realistic timeline that keeps the deal on track without rushing important decisions. Our team has years of experience in setting practical milestones and managing expectations, ensuring a smooth transition for everyone involved.
- Deal analysis & strategy: We’ll dive into the financials, with a focus on EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). EBITDA is a key metric in valuing a practice as it gives a clear picture of operational performance. We’ll analyze to uncover any opportunities that may be missed and identify areas of efficiency improvements. Together, we’ll build a strategy to make the newly expanded practice thrive.
- Capital assistance: Our team includes capital assistance specialists who will work closely with you to understand your financial needs. Whether you need guidance on finding the right strategic lending partner or you choose to bring on an equity partner to your firm that can bring capital to the table to assist you in the acquisition, we will formalize a plan that works best to help you make the acquisition a reality.
- Retention Strategy: The biggest risk with any acquisition is loss of clients/revenue. We’ll work with you to develop a comprehensive client retention strategy that protects your investment to ensure a smooth transition.
Don’t go it alone. With our acquisition solutions and experienced team, you’ll have a partner who is as invested in your success as you are. We'll be there every step of the way, from initial valuation to post-acquisition integration, ensuring that your acquisition helps to fuel the growth of your business.
Succession Solutions
Have you considered what happens when it’s time to pass the torch?
Planning for the future of your practice doesn’t have to be daunting. We’ll help you navigate this crucial milestone, ensuring your legacy lives on. Here’s how we help you navigate a smooth hand-off:
- Preparing for the long-term future: Next Generation Advisors
- Finding and attracting next gen: We’ll help you find up-and-coming advisors who share your values and vision for the practice.
- Cultivating your successor: Once you’ve found your next gen advisor, we’ll explore sustainable growth strategies and help build a client process driven by advocacy and retention. Take the guesswork out of driving long-term success by establishing systems that will increase efficiencies and elevate the client experience.
- Smooth transition: When the time comes, we’ll help guide the process of hand-off to the next generation advisor to ensure it’s a transition that keeps your clients happy, your legacy in-tact, and the business thriving. This could mean helping your successor identity financing or bringing an outside equity partner to assist your next-gen advisor with the capital needed.
- Peer to Peer: Passing the torch to a trusted colleague
- In Network: Looking to keep it in the family? As a USA Financial affiliated advisor, we’ll help you find the perfect match within our current network.
- External: If the right fit doesn’t exist inside the USA Financial network, we’ll work closely with you to identify and evaluate the solution that best fits your needs..
- USA Financial Acquisition
- Strategic Acquisition: Our team provides an option for qualified (and affiliated) financial representatives to have USA Financial (with our capital partner, AmeriLife) to execute a strategic acquisition of their firm. This exciting program provides some flexibility for the advisor to take some chips off the table today while having a locked-in purchaser at a date in the future (providing for a first-bite, second-bite scenario).
- Emergency Sale: Think of this as your back-up in case of death or disability. For advisors that don’t have an emergency contingency plan, this agreement provides you with the peace of mind to know that USA Financial will step in and takeover (as well as purchase) your practice. Our team provides an option for qualified (and affiliated) financial representatives to transition and sell their business. We’ll explore sale opportunities and work closely with you to orchestrate a strategic transition for you and your clients.
Remember, succession planning isn’t just about your retirement. It’s about securing the future of your business you’ve worked so hard to build. Whether you’re cultivating the next generation, looking for a peer to take over, need an emergency solution, or a strategic partner, we’re here to help.
Relevant insights:
USA Financial M&A Solutions FAQs
USA Financial’s approach to M&A (and succession) is very customized to the needs of the advisor. We will carefully evaluate what you are trying to accomplish and discuss different paths you can explore to accomplish your goals. There isn’t a one-size-fits-all approach to acquiring a practice or selling your financial advisory practice. The key is to start with the end in mind. From there, whether you want to maintain 100% equity or you want to go into it with a capital partner will determine the right course of action for your situation.
We’ll always look within our network first. This helps advisors so they can maintain similar systems/processes/technology. Secondly, we’ll consider personality and geography. With today’s technology, geography has less importance for many advisors as they have trained their clients to meet virtually.
Not at all. While this is nice, it’s not a requirement. However, we will want to work closely with you to identify the right successor to care for the clients you serve and the business you’ve worked so hard to build.
For advisors that have executed a strategic acquisition with USA Financial and AmeriLife, we will look at each opportunity along with you to evaluate the possible acquisition. If we all agree that it is a good opportunity, we will enter into that acquisition as a financial partner with you.
USA Financial is NOT a lending institution. However, we have built some strategic partnerships with lenders within our industry that we would be happy to pair you with once we understand your goals.
It’s never too early. But it can be too late. Ideally you want to begin planning for your succession while you still have some “gas left in the tank.” For most advisors, this is at least 3-5 years before they envision an exit.
USA Financial maintains an Advisor Blue Book* calculation for its affiliated advisors. This is simply a ballpark idea for the value of your practice. Typically, the value of the practice comes down to revenue and EBITDA (using industry specific multiples).
*USA Financial is not a business valuation expert and is not responsible for any misapplication of the information provided herein.
While there are many websites and businesses that act as a marketplace for advisory practices, we’ve found that connecting with strategic partners (like USA Financial), wholesalers, and others within your community is a great place to start.
We’ve helped advisors find next generation advisors in a number of places. We have access to a database of licensed advisors that we can market to directly. We’ve also helped advisors place ads in their local community.
