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Better Business: Brett Davidson with tips on what not to do if you’re planning to retire from your financial planning business

  • By Jason Stockwell

Brett Davidson, founder of FP Advance, highlights why setting a new vision for yourself and your financial planning business has the power to transform not just the present but also to boost future success too


Have you ever read articles about how great everyone else is doing and felt a bit ‘less than’ as a result?

If you’ve been in business as a financial planner for a while, you can certainly go through phases where things feel a bit flat, or a bit stuck. That’s pretty common.

The frustration sets in when you can’t put your finger on why you feel that way, and therefore can’t decide on the appropriate next steps for your life and your business.

The real challenges come when you start thinking about your exit plan from the business. Everyone tells you that you need to plan well ahead. Will you stay, sell, or create internal successors?

The truth is there are no easy options.

The challenge is particularly acute for genuine financial planning firms that don’t want to sell out to some vertically integrated consolidator.

In my experience, most adviser-owners contemplate selling when they are worn out, mentally and physically, or they’ve just run out of ideas on how to get to the next level. While there’s nothing wrong with that, it’s not the best place to find yourself making major life decisions.

The internal dialogue goes something like this: “Do I have the energy for the next stage in the game?”

This question is based on the erroneous assumption that the next phase, the future, will look and feel the same as the past, which has been hard work at times.

Let me assure you, it doesn’t need to be this way.

What not to do

In my experience there are a few things you might try, to get yourself out of this frustrating place, that won’t work. Let me outline them for you:

1. Business planning by committee

When you’re not 100% sure which direction you want to head, it’s tempting to get input from other people in your business. Be careful.

If you have some junior partners coming through, who are genuine future successors, then by all means get them involved in contributing to the vision for the next phase of the business journey.

However, if you are seeking input from members of the team who are not owners of the business, and are never likely to be, it feels all wrong. These people depend on you for their jobs. It’s not ok to show your indecision and worries about the future to them.

You can’t delegate setting the vision for your own business.

2. Find a quick buyer

When you’re frustrated and feeling a little burnt out it’s tempting to think “I’ll just find a buyer and go.” There are a few reasons why this tends not to work:

  1. If you are at all concerned about the buyer sharing your cultural and ethical values, then finding a buyer can mean kissing a few frogs. That takes time and effort.
  2. Quality buyers are more interested in businesses that already have some level of succession planning and continuity in place, depending on the size of your firm. If they are looking at keeping your current office, team, and location going, then having some degree of succession planning in place really adds to the valuation metrics.
  3. Even if you walked out this morning and found a buyer this afternoon, by the time they make you an initial offer and do their due diligence, six to 12 months can easily fly by.A deal can still fail at the 11th hour after all of that effort, so until something is signed, and you’ve been paid your first chunk of cash remember: it’s never a done deal.
  4. The final question is a personal one: what will you do with yourself once you sell out? If you’re still only going to be 57 years of age at sale time and you might live to be 100 years old, what are you going to do for the rest of your life?

Don’t be too hasty in calling it a day before you get clear on the answer to that question.

3. Coast home

The final option that goes through most people’s heads is, “Why don’t I just coast from here?”

It sounds really attractive until you try it.

Slackening off is like pouring a huge tank of water on the fire that burns inside you. Three months in you’ll be feeling as flat as a pancake emotionally.

In business, as in life, you are either growing and going forward or you are in decline. There is no plateauing.

The fix

If you are in your 50s, or even early 60s, I’m going to suggest that you might not be done yet.

Revisiting your own goals and your available options often leads to the conclusion that you need to ‘go again’.

What does that look like?

It means setting yourself and the business a new, exciting, bold 20-year vision. This will be something that excites every member of your team, and gets you out of bed with real enthusiasm every day.

Will you be there for the next 20 years? Probably not. However, setting a big bold long-term vision is the only way to eliminate the reduced energy and motivation that comes from having one eye on the exit all day long.

The answers you come up with need to be your goal bigger than money. The money won’t motivate you by itself. If you achieve this vision (in fact, if you achieve even 40% of this vision) the money will take care of itself.

What difference are you intending to make with your business? That’s what you’ve got to rediscover.

To get to this point on your journey required some hard slog. To move into the next phase means getting a few things sorted once and for all:

  • Ensuring you have a motivated and skilled team in place (advisers, paraplanners, administrators)
  • Identifying the future leaders and developing their leadership and managerial skills
  • Creating a strong, systemised, and repeatable
    client experience

These are the foundations of a business that can run itself, with you leading the vision from the front.

If you stay, you can do so in an inspiring environment with more time and money than you’ve ever had before.

If you eventually elect to wind down or retire you’ll have a business that can be sold for a great price, or have internal successors who are ready, willing, and able to buy you out.

That’s a great way to finish off an amazing career. After all your hard work you deserve to go out with a bang, not a whimper.


About Brett Davidson

Brett is the Founder of FP Advance, the boutique consulting firm that helps financial planning professionals to advise better and live better.

He is recognised as one of the leading consultants to financial advisers in the UK. You can follow Brett online and via social media:

You can follow Brett online and via social media:
Twitter: @brettdavidson
Facebook: www.facebook.com/FPAdvanceLtd
LinkedIn: www.linkedin.com/in/davidsonbrett
Website: www.fpadvance.com

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