The Right Approach for Finding the Right Senior Partner

For millennials looking to launch a career as a financial advisor, it truly is the best of times and the worst of times.

Demand for young professionals who can attract young clients is at an all-time high and expected to grow. On the flipside, nearly 30,000 millennial advisors who entered the field between 2010 and 2015 have already exited the profession, according to research firm Cerulli Associates.

With 27 percent of advisors looking to retire in the next 10 years, according to Cerulli, one way a next-generation advisor can survive the rigors of getting started is to team up with a senior advisor looking for a succession or continuity partner.

If partnering with a senior advisor who can help you get up and running sounds like the right strategy for you, there are some important steps to take before you start making calls. Successfully approaching a senior advisor about entering into succession or continuity agreement is a five-step process that requires time and tact.

Step One: Develop a Detailed Plan

Any decision that will impact the success of your career and the continuation of an established practice needs to start with a thorough plan. To get started, create a detailed profile of your best‐case partner, including:

• Their age, size of practice and niche markets
• Their products, planning and investment management philosophy
• Your “walk‐away” points (e.g. differences in philosophy, product, clients or style)

Next, polish your value proposition so it clearly shows why you would be an effective partner who could run the firm in the senior advisor’s absence either temporarily or permanently after they retire. Include details such as your strengths and how they line up with your potential partner’s needs.

A senior advisor will not want to finance the entire sale of their practice. So, before approaching a potential succession partner, know what you can pay to acquire a practice. The industry standard financing package is a 30 percent down payment by purchaser and 70 percent seller financing.

Step Two: Build Rapport

Once your plan is firmed up, it’s time to schedule face-to-face meetings with prospects. Be ready to ask questions about their:

• History
• Client base
• Advice and planning philosophy
• Investment management platforms
• Staff
• Other advisor relationships

Listen the same as you do when conducting a client discovery interview — the interview is all about them. Adapt your pitch to their model, and never offer suggestions on how they could run their firm differently.

Because many experienced advisors run a lifestyle practice they enjoy immensely and have no immediate plans to retire, bringing up a continuity or succession plan can be unnerving. Listen and watch for clues that indicate your prospect is uncomfortable with the conversation.

Step Three: Deepen the Relationship

Once you have established trust and rapport, work to secure successive commitment objectives, such as opportunities to share personal and practice information and to mentor and collaborate on projects.

In addition to commitment objectives, look for openings to suggest sharing referrals, covering for vacations and sabbaticals, hosting joint presentations and participating in events together.

These steps should lead toward securing the ultimate commitment — developing a partnership with a succession or continuity agreement.

Step Four: Make the Ask

This may seem like the toughest step in the process, but if you’ve carefully planned the previous three steps, the prospect shouldn’t be surprised by your request.

Keep in mind a succession partnership happens after multiple conversations and interactions. You’re not only sizing up your prospect, your prospect is sizing you up, too.

To prepare for the meeting, script how you will ask for the agreement and practice ahead of time. Try a few different approaches to see what works best for you:

• “You’ll need to exit at some point, so you’ll need a succession plan to protect your family, staff and clients.”
• “Would you be my continuity partner if something should happen to me?”
• “I could be your continuity partner should something happen to you.”
• “We should put a formal plan together.”

If you’re unsure about asking your prospective partner about entering into a succession agreement, you may consider starting by asking for a continuity agreement where you would run the firm if the senior advisor was temporarily out of work.

Step Five: Deepen the Business Partnership

Once you have a partnership with a senior advisor, take advantage of opportunities to learn from their experience. Many young advisors have successfully used a formal continuity or succession agreement with a senior advisor as the foundation for additional growth opportunities such as joint work, sharing experiences or a merger.

As you work through each step in this process, take time to uncover what’s important to the prospect regarding their exit. Remember these helpful tips:

• Don’t be too aggressive and try to immediately close a deal – be prepared to put in the time without immediate payout.
• Match energy levels.
• Don’t waste time on style opposites.
• Nurture the right deal, have patience and be persistent.

To get started developing your strategy to find the right senior advisor for you to partner with, download a copy of the Continuity Partner Approach Workbook.

Securities America, Inc., Member FINRA/SIPC