Leaving Behind Your Legacy:

10 Benefits of Having an Exit / Succession Plan as a Financial Advisor or Firm Owner.

One of the most important events, if not the single most important event, in every financial advisor’s career is the moment they ensure the efficacy of their vocational legacy. Because of this, it is incredibly important that the process of developing an exit or succession plan be executed strategically and with great care. This is done not only to avoid pitfalls, but to maximize the success of all the components that go into solidifying one’s legacy.

In today’s financial advisory ecosystem, exit planning, succession planning, and potentially selling your business looks a lot different than it used to. As competition to acquire wealth management firms continues to increase, existing firms, outside advisors, and practice aggregators, are more willing than ever to customize an agreement for the advisor that empowers them to have flexibility and control over how and when they exit. The days of advisors and firm owners receiving a check and leaving twelve months later are diminishing. Although that is still an option that most acquiring firms will accommodate, by in large, advisory professionals are wanting instead to elongate their careers and maintain control of their exit. Additionally, buyers are realizing that the longer the selling advisor stays with their firm, the more likely it is that their clients will be retained after their final exit.

In another article (Exiting on Your Own Terms) we examine some of the dangers of not having an exit/succession plan. This edition, however, will focus on ten of the benefits involved in having a strategic exit plan:



Benefit #1: Eat your own cooking.

The precise origin of the phrase “the cobbler’s children have no shoes” is unknown but it is estimated to be at least a few hundred years old. This simple yet powerful phrase perfectly iterates the folly of not taking the time to do for yourself what you constantly do for others. As a financial planner, it is especially important to practice what you preach. Not merely for the sake of appearing authentic, but to take care of yourself, your family, and your staff. Having a plan for the future of your business, is one of the most foundational ways you can do this.


Benefit #2: Gain an understanding of your personal and business goals.

Many advisors and firm owners have never been prompted to holistically map out what they desire to receive from their eventual exit/succession plan. One of the benefits of establishing such a plan is that you will then have a much clearer idea of what you must do now, in order to make those desires become a reality.


Benefit #3: Maintain control of how and when you exit.

Desiring to control the precise time and manner of retirement is one of the most common objections given to the notion of beginning the succession planning process. Ironically, starting the succession planning process early, is often what helps advisors and firm owners gain the most control over the timetable and manner of exiting. Starting early allows you to find the right partners who are willing to provide you with the flexibility to exit on your own terms. Furthermore, it is not uncommon for additional incentives to be offered that could elongate your career, should you choose to do so.


Benefit #4: Maximize your valuation.

Maximizing an advisory business’s value deals with building an interdependent business that has repeatable systems and processes. Additionally, there must be a growth minded focus and a great attention to the fiscal health of the organization. As always, proper planning will help you build your business in such a way to capitalize on its final yield.


Benefit #5: Retain control by generating a number of strategic exit options.

There are many ways to sell your business and there is no such thing as a perfect deal. With that being said, having multiple options that vary in shape and form not only mitigates the risk of not having a plan, but it increases the power of your position as a seller.


Benefit #6: Reduce stress for yourself, your family, and your staff.

My father always used to say, “when control goes out the window, stress and strife come in the front door.” Like most things in life, the best way to gain control and have peace of mind, is to develop a strategic plan.


Benefit #7: Ensure continuity so that your clients and staff are taken care of.

Almost all advisors genuinely and deeply care for the wellbeing of their clients and staff. Having a plan to seamlessly pass on the proverbial baton to a qualified partner is one of the best ways to ensure they are taken care. Whether your exit goes as planned or is expedited due to outside circumstances, a continuity or exit plan is valuable for all involved parties.


Benefit #8: Minimize taxes.

You have worked hard to achieve enterprise value. Certainly, it would be desirable to maximize the final yield of your business. Depending on the current or impending political climate, navigating the taxation of your business’s sale will play a significant role in the monetization of your business. Naturally, this factor will continue to evolve and therefore it is advisable to seek counsel from an expert who has navigated numerous transactions of this nature before.


Benefit #9: Ensure that you are choosing the right partner.

Whether it is cultural, behavioral, or economic, the mutual compatibility of the firm and the people you choose to align with as an exit or succession partner, is of immense importance. You have spent a lifetime building your legacy. Handing it over to a likeminded partner who will handle it with respect and excellence, is key for your personal gratification as you look back on what you have accomplished.


Benefit #10: Ensure your legacy remains intact.

As illuded to previously, your legacy is the capstone and the ultimate metric you will reflect on as a business owner. Your legacy will be determined by your execution as an enterprise leader and the well-being of your clients, employees, and loved ones, as you exit.




The design as to when and how you exit or engage in a succession plan is different for every single firm owner and advisor. With that being said, every practice or firm owner should have a plan. We would recommend starting as early as three years prior to a potential exit or transition. For starters, you want to identify what you have and what you desire for your own financial and personal life. Then work to maximize the value of your firm as well as the strength and thoroughness of your own personal financial plan. These items will benefit you whether you are exiting now or later. The only way to ensure exiting on your own terms and leaving behind the legacy you have built, is to have a plan and to begin thinking about it now.






Advisory DNA provides advice and guidance to advisors and firm owners throughout the process of a transition, merger, or sale of their advisory firm. If you would like a complimentary consultation with one of our experts and would like to learn more about our consulting process, please email us at info@AdvisoryDNA.com or contact us through our website.

Newsletter Signup

Be the first to be notified on new content and updates