Why Advisors Need a Sustainable Business


Recorded at the Market Counsel Summit. Presented by: 

"Having a sustainable business is important in any service. But for advisors, it's incredibly critical. And the reason has to do with it is part of the value proposition that advisors give to their clients, there's really an embedded promise in that service, that the plan that they are building will be one that will last through the client's lifetime.

The problem is this, that most advisors meet their clients, their wealthy clients at a point that they themselves are getting older, they're more mature, they're mid career. So the chance of their career, blasting through the need horizon of their client is not very high. In other words, the client and the advisor end up retiring at the same time or near to, that doesn't work very well. So as a result, needing to have a service that has sustainability that can survive through generations of advisory advice is really important. And that is, in a lot of ways the Achilles heel of the independent model, with independent advisors, which do a tremendous job of being in their communities and talking to the people that they know the best and about in providing that service in the community. But they need to be able to tell their clients that their firm will be around in the long run.

Luckily, there are solutions to that. And the solutions have to do with starting succession planning early in the career, making it part of the ethos of the firm itself, and building in equity for GE to second generation advisors for the long run. By doing that, you end up with a sustainable business.

Most advisors think about succession as an end. But in fact, it's the beginning. It's the start of building a sustainable, growth driven business, by spreading out the equity in a firm by bringing in your junior advisors as partners in the growth of the business in the equity of the business and started not only share equity, but also be able to share some of the responsibility, the management responsibility, you start to build that firm in the long run, that has to begin early. And that has to be an embedded idea as part of the culture of the firm." — Bob Bueerman, CEO, FP Transitions

Resources: FP Transitions

Related: Helping Advisors Transform Their Practices with Brad Bueermann