In recent years, there has been an increasing focus on succession planning, and an explosion in the number of consultants providing advice on merger and acquisition deals, and metrics about the deals themselves. Yet thus far, almost all of the guidance and "best practices" offered regarding succession planning focus almost exclusively on the veteran planner who is selling the business, and doesn't necessarily consider the buyer's perspective.
In this guest post, advisor Daniel Zajac shares his thoughts on succession planning from the "other" side of the deal - as a 32-year-old buyer looking at purchasing the firms of retiring advisors. From common deal terms like size of down payment and the relevance of earn-outs and employment agreements, to the relative importance of "good fit" over finding the right/best price in the first place, Zajac's perspective provides some helpful color and contrast to the "traditional" advice on advisor succession planning.
So whether you're an advisor who may someday be thinking about selling your practice - and wants to gain some insight into a buyer's mentality - or are a younger financial planner yourself looking for a better understanding of whether buying a practice is a good way to get started as an advisor (and what to think about if you're going to go that route), I hope that this article provides some helpful food for thought!