Helping advisers help themselves in succession planning

At September gathering, FSI plans focus on M&A, practice valuation, contracts, deal structures and best practices for implementing a succession plan.

My colleagues and I at the Financial Services Institute are privileged every day to see the impact our members have on the regulatory and legislative process when they come together to work toward a common goal.

This ability to make a difference is not limited to the policy arena, though. When the FSI community turns its combined focus and energy toward tackling common challenges within the industry, it is extraordinarily effective at driving a deeper understanding of the key issues that affect advisers across the country, and in developing and communicating strategies to help the industry adapt and thrive in the face of such obstacles.

In the latest example of how FSI and our community of highly-engaged members are working in concert to foster a better understanding of a key challenge in our industry — specifically, the issue of succession planning — and to identify potential solutions, look no further than our upcoming Financial Advisor Summit, scheduled for Sept. 28 through 30 in Washington, D.C.

At this year’s Summit, we are focusing sessions on succession planning and all it entails. As Investment News reported on July 9, we recently polled our members to develop a clearer view of their outlook on this critical issue, among other topics. Consistent with other industry surveys, our poll found that a minority of respondents (just 41%) had a succession plan in place.

The poll dug deeper, though, to reveal that many of our members are not even considering selling their practices or buying another one over the next five to 10 years, despite generally favorable conditions in the mergers and acquisitions market for financial advisory firms and numerous funding options. Fewer than 30% of respondents said they were considering acquiring another practice in the next five years, while only 15% were considering selling their own practice over the same time frame.

Given the complexity of the topic, it’s understandable that many advisers find succession planning somewhat daunting — after all, successful advisers spend their careers working to build up and strengthen their businesses, not thinking about how to transition out. As FSI financial adviser member Joe Himelick, founder and managing partner of Himelick Financial Group, says, “If it were easy, I suspect that more advisers would have a succession plan. But it’s a long, drawn out and difficult process.”

This year’s summit will respond to these concerns by including a discussion track specifically focused on succession planning. Developed by Mr. Himelick, Dean Harman — an FSI financial adviser member, founder and managing director of Harman Wealth Management and member of FSI’s Board — and the summit task force, the track will address advisers’ questions about the topic in depth, including: discussions on the M&A market, practice valuation, contracts and deal structures, and tactical best practices for implementing a succession plan.

“The workshops will not only offer advisers a multi-lens view into a very complicated issue, but send them home with a solid foundation of knowledge that will enable them to take action with regard to their businesses,” says Mr. Himelick.

Mr. Harman notes that the succession planning track at the summit comes at the perfect time.

“Now is the time to be thinking about this issue and putting a plan in place,” he says. “Our goal is to help advisers develop a broader perspective on this issue, so they can act accordingly and plan ahead while the opportunity is there.”

FSI is very pleased to play a crucial role in addressing the challenge of succession planning — and many other important topics on advisers’ minds — by facilitating conversations that help our members help themselves. As we have seen time and time again in our advocacy efforts, there is almost no limit to what our highly-engaged, vibrant community of financial adviser and firm members can accomplish when they focus their efforts on a common goal, whether it’s to influence change in the regulatory and legislative arena or to solve looming problems like the issue of succession planning.

Dale E. Brown is president and chief executive of the Financial Services Institute Inc.