Prospera Financial Services, a Dallas-based independent broker/dealer, has launched a formal suite of succession planning resources. The firm’s “Succession Your Way” suite encompasses three distinct options, including Prospera Wealth Advisors, where the firm will purchase an advisor’s book of business that it will manage in-house.
“So many advisors, if they’re at a wirehouse or some of the other firms, they have one option for succession—whatever their sunset program is. And we have something similar,” said said Tarah Williams, Prospera's president and Chief Operating Officer. “We realized everyone has different needs, and so we really wanted to take it cradle to grave. When someone joins us, we want it to be forever.”
The firm has acquired two books of business so far, and has one advisor managing them in house under the Prospera Wealth Advisors model. It can be a solution for emergency situations; advisors can designate PWA to take over their accounts in the event that something were to happen to them, Williams said.
It can also be an option for advisors who may want to downsize and segment their clients.
“We’ve had multiple requests to be able to turn over maybe a portion of their business to Prospera to manage,” Williams said. “If you think about it as an advisor, so often how you start out is not necessarily how you evolve and finish. You may start out with all clients, and then you eventually segment into different groups if you will. Sometimes you’ll end up with too many households that you can service in a manner that you want to. So it’s good way to monetize part of their book and downsize.”
Prospera hasn’t started it yet, but it also hopes to use that group as a training area for newer advisors, or a soft landing for other advisors.
If an advisor does not want to sell their practice, another option is Prospera’s Associate Advisor model, in which the firm will help source and develop an associate advisor with plans to become a successor.
“We’ve always had advisors that have wanted to hire someone into the practice, whether it’s succession or just continuing into the business. But we really built a whole process around it now,” Williams said.
Prospera will help recruit associate advisors into an office. Advisors in this program will have a dedicated practice management person that helps set up that associate advisor position, how that person should be compensated and what they should look for in a candidate. There’s also a dedicated launch team.
The third option for help with succession is the firm’s Advisor Practice Exchange Program, which facilitates acquisition and succession within Prospera, a “match.com for advisors,” according to Williams. The program, launched over a year ago, will pair buyers and sellers within the Prospera universe. But it will also help them with structuring deals and securing financing, if needed. The firm provides its own financing, as well as third parties.
The firm has done about 17 succession events in the last year across a total of about 170 advisors.
“What we’re hoping for is, no matter what it is that they’re looking for, or their needs are for succession, whether they’re on the buy or sell side, that we have dedicated resources to help them plug in where it seems to make sense for them,” Williams said.