Kestra Financial launched its Bluespring Wealth Partners subsidiary in July 2019, aimed at acquiring RIAs looking for a succession planning solution. When Bluespring acquires a company that does not have a succession plan, it places a successor in its Successor Academy, an “intensive” two-year program aimed at training second-generation advisors to eventually take over the business.
But Bluespring recently had demand from first-generation advisors—owners and principals of these firms—for a program of their own, and the firm rolled out the G1 program this year, Bluespring President Stuart Silverman said. The firm will bring speakers into a study group environment to help owners through the post-acquisition phase and the transition involved in handing over the reins to the next generation.
“When you're an entrepreneur, you built this business from scratch. It's your baby and giving up control and learning to work with a junior partner and trying to implement and integrate what they're doing with what you're doing and present it to your clients and to the business and how it's going to go into the future—sometimes it can be challenging,” Silverman said. “It's uncharted waters, so to speak.”
Silverman knows that transition well. He has built and sold companies, including Fusion Advisor Network, which Kestra purchased in 2012.
“There's also a lot of psychological change, where suddenly there's not the same pressure you might've had about money," he said. "You might be starting to think about what else do you want to do. How do you want to be impactful? How do you want to make a difference? How do you want to spend your time? And so we work on things like that.”
The program will bring in folks who have sold their businesses and gone through the same transition before, to share best practices and ideas. Silverman will also bring in outside consultants, specialists and therapists to talk about the psychology of change. Rather than a two-year program, the G1 program will be ongoing.
While the premise of Bluespring has been to help founders retire out of the business with a successor in place, Silverman said at about 90% of their firms, the owners are still around.
“We don't force change because we have many firms we bought with this principal still running the business just like they did,” Silverman said. “But over time, a big part of our value prop is, ‘If you have a successor, we're going to train them. If you don't, we're going to find one. So that when you are ready to slow down or give up some responsibilities, there's someone there well-trained. Or a team there well-trained to continue on and make sure that your legacy lives on.’”
Bluespring is flexible when it makes acquisitions, the only rules being that it must take at least a 51% stake and it looks only at companies with at least $1 million in EBITDA. It also treats principals at the firms as entrepreneurs, with creative compensation programs like equity incentives. Also, Bluespring allows companies to use their own technology but offers them a full suite of resources in case they need them.
The firm has acquired eight RIAs so far, including Beacon Financial Group in Texas, Hickory Asset Management in Ohio and Believeland in Georgia, with a few more transactions in the pipeline for this year. It has about $7 billion in assets.