SuccessionBox Solutions by Category:
SUCCESSION
CONVERGER
LENDING
AGREEMENTS
ATTORNEYS
CONTINUITY
SHORT-TERM SUCCESSION PLANS
40% of Advisory Assets Will Transition in 10 Years, According to Cerulli
New report series covering breakaway advisors reveals one-in four advisors near retirement are unsure of their succession plan.
Within the next 10 years, 37% of financial advisors, collectively controlling $10.4 trillion, or 40% of total industry assets, are expected to retire. Yet, one–in four advisors who are expected to transition their business within the next 10 years are unsure of their succession plan. New research issued by Cerulli and sponsored by Commonwealth Financial Network, a national firm providing financial advisors with holistic, integrated solutions, describes the challenges and opportunities breakaway advisors face as they explore independence, including transitioning their business as they approach retirement.
In evaluating potential successors, advisors place the most importance on personality of the acquiring advisor (88%), likelihood to put the client’s interests first (85%), and the regulatory/compliance record (85%). “It is essential that there is a strong alignment of core values, service delivery, and investment philosophy between firms,” states Rose. Style differences with the seller (52%), client transitions from the seller to the buyer (48%), and overall time commitment to finalize a deal (48%) are the top challenges for advisors acquiring a practice, according to practice management professionals.
Succession Converger
When a 10 year succession plan is too long and an outright sale with a fast exit doesn’t feel right or too fast you may be in the converger zone. Convergers is a structured and collaborative process between two advisors which lasts 2-3 years and involves a “sell, transition, sell” core strategy (with numerous variations and provisions). It’s designed for maximizing value, minimizing risk and most importantly maintaining client continuity and transition experience.
The Converger Plan is a customizable blueprint outlining the specifics of a Converger alliance, including partial asset acquisition agreements, provisions, transitioning agreements, and relevant details. However, we didn’t invent convergers, just structured a loose concept into a structured plan. You can refer to it as the succession tranche client continuity sandwich if you want.
Converger:
A strategic alliance between independent financial advisors, lasting 2-3 years, aimed at facilitating a planned and structured succession acquisition. This collaborative approach utilizes a phased "sell, transition, and sell" strategy through client asset tranche sales.
Converger Plan:
Customizable blueprint outlining the specifics of a Converger alliance, including partial asset acquisition agreements, provisions, transitioning agreements, and relevant details.
Succession Converger:
A framework within the Converger concept specifically designed for facilitating advisor succession within a 2-3 year timeframe. It utilizes a "sell, transition, and sell" strategy with client asset tranche sales, allowing the seller to maximize value and ensure a smooth retirement transition. Client continuity and a collaborative advisor-to-advisor approach are core principles throughout the process.
Acquisition Converger:
A specific type of Converger alliance focusing on staged client asset acquisitions between peers or advisors with comparable books. This collaborative process lasts 2-3 years and involves initial and subsequent client asset tranche sales, maximizing value for the seller while maintaining client continuity. Unlike outright acquisitions, convergers emphasizes collaboration and a phased exit without full integration or absorption of the seller's business.
Speak to an AdvisorBox Consultant about the Converger Plan Option
