Prospera Financial Services, a Dallas-based independent broker/dealer, rolled out a new program to help advisors buy or sell their practices. The Advisor Practice Exchange Program (APEX) is open to the firm’s 165 advisors to match buyers and sellers of practices within the Prospera network or, if needed, with unaffiliated firms.
“We have a number of advisors who are considering retirement, even if they don’t want to do it over the next year,” said Hilary Pluemer, managing director of advisor services at Prospera. “They’re starting to look at five years, seven years down the road. What we really wanted to do was make everything as seamless and easy as possible for them, so that everything is as seamless and easy as possible for their clients.”
Pluemer said the new program takes a "white-glove" approach, customizing the service for each individual advisor’s situation. Being a smaller firm, Prospera executives know each advisor in the network, making it easier to bring a personalized approach to the introductions, matching firm culture and specialties, Pluemer said.
The firm recently brought on Carolyn Sterling, a former advisor, to serve as business consulting and practice management specialist. Sterling guides advisors through the entire process of buying or selling, without getting involved in the negotiation process.
The firm provides acquisition and succession guides, white papers, recorded webinars, contracting resources and market and economic updates. Prospera has partnered with third parties if an advisor needs a practice valuation, and it will also connect advisors with attorneys who are familiar with the sale process and how to draft contracts. And while the IBD won’t directly finance acquisitions, it does have relationships with investment banks who specialize in advisor lending, Pluemer said.
There are currently about 15 advisors in the program, and another 25 who have an interest in acquisition. Three sales have taken place in the past year.
“From the flip side of it being a buyer, that really is an advantage within Prospera that we have such an active marketplace, if you will, to be able to buy another book of business. That really gives them an opportunity to build their own businesses,” Pluemer said.
Prospera joins other IBDs that have brought succession plan services in-house, including Cetera Financial Group, LPL Financial, Commonwealth Financial Network and La Salle St. Securities.
Firms recognize that a lack of succession planning among their older advisors means the assets they manage may evaporate off the firm's platform as those advisors retire. Helping those advisors structure a succession plan, ideally within an IBD's network, can make the transition easier for clients, more profitable for advisors and keeps the assets on the brokerage platform.