The current landscape of advisor succession is marked by two significant trends. Firstly, firms are initiating the process earlier, shifting from a focus on sales or mergers to a mindset emphasizing the creation of a sustainable enterprise. This involves meticulous proactive succession planning, mentoring, and training, to ensure a smooth transition for clients. Secondly, there's a notable shift in compensation redesign, with a move away from revenue-based compensation, now towards the B.B.P. model (base, bonus and profits) to attract and retain talent, crucial for the success of succession plans.
Success in inorganic growth/M&A, seen as a key strategy for the industry, hinges on two simple yet often overlooked factors: thorough preparation internally, encompassing financial readiness and intentional capacity building, and a steadfast commitment to marketing and owners making the time to remain involved until the deal is closed, which, when executed effectively, positions firms to stand out in the face of the impending "silver tsunami."
David Grau Jr. on Advisor Succession