Succession plan success story

The story of Benjamin Tobias’ succession plan is proof that having a good plan in place can help a firm endure and evolve through even the worst of circumstances.

Mr. Tobias, 67, had been grooming two advisers to take over his Plantation, Fla.-based advisory firm, Tobias Financial Advisors, about three years from now.

That plan took an abrupt turn in 2016, when Mr. Tobias’s wife’s fight against cancer intensified, involving eight hospital stays that year.

“In 2016, it got really bad,” Mr. Tobias said. “I was a basket case and unable to work.”

Barbara Tobias, who has been battling a form of blood cancer since 2010, is a former elementary school teacher who had become the financial planning firm’s office manager.

Mr. Tobias already had a plan in place that involved Matt Saneholtz, who joined the firm in 2005, and Marianela “Nela” Collado, who joined in 2015.

The original plan was for Mr. Saneholtz and Ms. Collado, who together owned 25% of the firm in 2016, to gradually build up a 75% ownership stake by 2021, when Mr. Tobias will turn 70. From there, the plan was for Mr. Tobias to gradually reduce his ownership and workload over while heading toward full retirement at age 75.

Mr. Tobias, who now describes himself as a “24/7 caregiver” for his wife, said it became clear in 2016 that his succession had essentially already happened.

“Matt and Nela kept everything going, and never missed a beat,” Mr. Tobias said. “At end of 2016, I said, ‘You’re really running the business already so let’s move up our plan.’”

Mr. Tobias, who is still featured as the founder on the firm’s website, had to give up his planned 25% ownership stake, which was originally designed for sale to a third generation of owners. The financing arrangement through the Small Business Administration required that Ms. Collado and Mr. Saneholtz finance the remaining 75% that they didn’t already own.

Meanwhile, Mr. Tobias, who was in the office last week to meet with a client who had asked to see him, is standing by his promise to the new owners that “I’ll be there if you need me.”

“In 2016, I knew what was happening and saw what was happening,” he said. “But if Matt or Nela weren’t there, I would not have had any choice. I would have had to get with one of the consolidators to make a sale.”

(More: Veteran adviser locks down a succession plan that lets him stay involved)

George Tamer, managing director of strategic relationships at TD Ameritrade Institutional, said having a succession plan that could be executed put Mr. Tobias was in the minority.

“In our most recent FA Insight People and Pay Study, we found that nearly two out of three advisory firms didn’t have an adequate succession plan,” Mr. Tamer said. “We can’t say it strongly enough: Having a formal, written and well-thought-out succession plan in place is vitally important for all advisory firms. It mitigates the risk of the firm losing clients if a key adviser or principal is suddenly absent or pulled away from the office.”

The succession plan looks just as bright to Ms. Collado, 41, now the firm’s chief executive and senior financial adviser, and Mr. Saneholtz, 39, who is president and senior financial adviser.

Ms. Collado, who was a principal at Bessemer Trust in Miami prior to joining Tobias Financial Partners, first became familiar with the advisory firm through industry events, where she frequently saw Mr. Saneholtz.

Mr. Tobias started the business in 1980 as an accounting firm, but by 1988, when he earned his certified financial planner designation, it had morphed into a financial planning firm. In 1990, he sold the accounting business, and five years later he became a fee-only planner.

Ms. Collado, who also has an accounting background, saw the firm’s CPA origins as common bond.

“I felt like we had similar backgrounds, both starting in the CPA world,” she said. “They presented an opportunity to be part of Ben’s succession plan, and what an opportunity it is to take a solid company and build on its reputation.”

The firm, which manages more than $350 million in client assets, has grown from five employees in 2016 to a dozen, if you count Mr. Tobias.

While the new owners are committed to keeping and leveraging the Tobias brand, they also wanted to put a fresh face on the 39-year-old business.

“When Nela came on board, we upgraded the logo and gave things a fresher look,” Mr. Saneholtz said. “It was kind of a rebrand and it was gradual, but clients took notice.

“The Tobias name has a lot of clout in the local community and we wanted to honor that,” he said. “We decided to highlight the name to keep the legacy going, and we wanted to keep the brand recognition but also wanted to point out that there are more of us now and it’s not just Ben.”

Mr. Saneholtz, who joined the advisory firm shortly after graduating from college, said his ownership status is still sinking in.

“A couple of clients still want to speak with Ben or appreciate having him stop buy during a meeting,” he said. “It’s been almost two years, and I still have to pinch myself sometimes when I think about things like our lease being up soon and looking for new office space.

“It’s no longer a 9-to-5 thing because we’re now living and breathing it, and that means market downturns are a bit scarier,” Mr. Saneholtz added. “It was a dream of mine to be a partner and owner and a fee-only financial planner.”