We’ve had experience buying some practices. Not death scenarios but more retirement scenarios, with someone looking for a purchaser. Those situations have taken a very long time to develop from the initial conversation to actually getting it accomplished.
The one we did most recently took more than three years.
It was an aging advisor, and the biggest challenge was getting them motivated and making sure they understood they needed to get the sale done. Some advisors will work until they die at their desk, but most do believe they have to do it. It’s getting them to take action that is brutally difficult, and getting them to move broker dealers, if necessary, is the largest hurdle.
We spent a lot of time educating the advisor and showing what would happen to the value of the business if they didn’t take action: Their family would get significantly less, their clients wouldn’t be served properly and promises they’d made to their clients wouldn’t be fulfilled.
You have to show them what will happen to their family and talk about why, after all these years in the business, they would choose not to protect their family at the highest level and get as much from their business as they possibly can. If you die with no plan, you didn’t really fulfill your promise as an advisor to your clients and family.
It’s a constant reminder and discussion about the important aspects of creating a succession plan for a buy-sell in our industry.
Scott D. Edelman, is a 22-year MDRT member from Yardley, Pennsylvania. Find more tips in the MDRT Business Continuity Decision Tree.