Financial Planning Business For Sale

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Sadler and Garcia had collaborated on some small accounts in the past. Months of work and hundreds of client meetings followed.

By mid-2014, Sadler retired and Garcia's AUM jumped to $225 million (it's $260 million today) from about $105 million.

Another key factor: Do clients have unmet needs, such as estate planning?

"That's where you look for revenue opportunities that haven't been uncovered, and the reason that they haven't is because the advisor maybe didn't have the opportunities or energy to do so," Thielke says.

For example, Raymond James introduced a revised program two years ago.

Advisors at the firm now have two routes: They can agree on a one-time payment (Garcia and Sadler's choice) or stretch it out over several years, says Tom Walrond, COO of Raymond James & Associates' Private Client Group.For those who can, selling or buying a book offers a great way to cash out or double one's business, advisors say. Advisors who have bought books say there are several elements to evaluate, such as business mix, size (both AUM and number of clients), client demographics and personality.Fee-based business can be worth more than commission, says RBC advisor Stefen Thielke, who has acquired two books.Inside a small sandwich shop about two years ago in Huntsville, Ala., Wade Sadler made up his mind about how he was going to retire.The Raymond James advisor was having lunch with his colleague and friend Luis Garcia.Younger advisors can find unparalleled opportunities in this demographic wave to grow their business by inheriting their elders' books."The problem is that, as you're going through the daily grind, you are not really looking around at aging advisors in your office," Garcia, 50, says."This kind of just happened, but it turned out so well."Firms, meanwhile, have been maneuvering to encourage younger advisors to inherit more books of business, rewriting policies and freeing financing in a bid to ensure smoother client transitions and that assets stay put.Recruiter Mickey Wasserman notes that valuations may be higher in the independent space, up to 2.5 times trailing production, but he points to the difficulties of simply jumping ship to quickly sell and retire.Advisors making a move need to solidify their client base, which can take time, particularly if the assets are sticky, Wasserman says.Threlkeld has completed a dozen acquisitions since leaving the wirehouse space 12 years ago.He closed on his latest deal, a million book, in September."Only in the independent channel will you find an appropriate multiple for a practice acquisition or sale," Threlkeld says.


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