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G2: Building the Next Generation

Book Description

Vital guidance to ensuring the future of your firm

G2: Building the Next Generation provides financial advisory firms with a clear roadmap to management succession. Based on the author's 17 years of experience with over 1,000 firms, this book provides a systematic process to help you identify, develop, and install the new leadership that will guide your firm's future. Extensive statistical research backs proven strategies for structuring management and succession, overcoming obstacles, selling equity, and more, while expert guidance walks you through the process and warn you of potential pitfalls along the way.

A generation of entrepreneurs used their talent and ambition to build an industry; to ensure that their success lives on, those leaders now face the formidable challenge of succession. With the future of your firm at stake, how do you recruit, train, mentor, and develop the next generation of professionals, owners, and leaders? This book shows you how to find the people you need, and develop them into the leadership your firm deserves.

  • Identify and develop future leaders from the pool of existing and upcoming talent
  • Structure management and management succession to ensure successful transition
  • Begin selling equity to your firm's next generation of leaders
  • Learn smart strategies for dealing with setbacks along the way

The next generation of leaders will shape the future of your firm, but collectively, they will define the future of the entire advisory industry. Firms who succeed in developing their best talent will continue to thrive—those who fail will be left with a great car, but no driver. Getting this right may be one of the most critical points of your career, and it isn't something that should be left to chance or "gut feeling". G2: Building the Next Generation gives you a solid, grounded, systematic approach for ensuring your firm's long-lived success.

Table of Contents

  1. Cover
  2. Title Page
  3. Preface
  4. Acknowledgments
  5. CHAPTER 1: Who Are G2s?
    1. Defining G2
    2. Developing the Next Generation Is Critical
    3. Just Hiring Them Is Not Enough (But Start There)
    4. What G2 Professionals Need
    5. G2s Need to Take Over Client Relationships
    6. G2s Are the Future
    7. Notes
  6. CHAPTER 2: The Career Track
    1. The Advisory Career Track
    2. Non‐Client‐Facing Career Tracks
    3. Progressing through the Career Track
    4. Being Flat
    5. Top Performers
    6. Reaching the End of the Track
    7. Notes
  7. CHAPTER 3: Recruiting G2
    1. Beginning with the End in Mind
    2. Hiring Levels
    3. Becoming the Employer of Choice
    4. Advertising
    5. Recruiting in Small Markets
    6. Screening
    7. Interviewing
    8. Opportunistic Hiring
    9. Experienced Hires
    10. Notes
  8. CHAPTER 4: Taking Over Client Relationships
    1. What Is a Lead Advisor?
    2. Qualities of a Trusted Advisor
    3. Transitioning the Lead to G2
    4. Notes
  9. CHAPTER 5: How Advisory Firms Develop New Business
    1. The Business Development Process
    2. When and How Clients Act
    3. Existing Clients as a Referral Source
    4. Some Theories about Referrals
    5. Other Referral Sources
    6. Beyond Referrals
    7. The Simple Mathematics of Reputation‐based Selling
    8. Principles of Business Development
    9. Notes
  10. CHAPTER 6: Be a Business Developer
    1. The Four Stages of Learning to Develop New Business
    2. Solving a Puzzle
    3. Finding Your Mentor
    4. Learning to Ask Questions and Listen
    5. Finding Your Specialty
    6. Developing a Niche
    7. Following a Disciplined Process
    8. Be Persistent
    9. Note
  11. CHAPTER 7: Managing People
    1. Defining Management
    2. Prioritizing Management and Communication
    3. Accepting Responsibility
    4. Providing Feedback
    5. Dealing with Poorly Performing Team Members
    6. Performance Evaluations
    7. Being a Mentor
    8. Notes
  12. CHAPTER 8: Managing Up
    1. Speaking Up
    2. Getting Involved
    3. Taking Responsibility for Your Team
    4. Supporting Your Colleagues
    5. Measuring Your Criticism
    6. Managing Your Own Expectations
  13. CHAPTER 9: Managing Yourself
    1. Defining Balance of Life
    2. Balancing Time
    3. Dealing with Weaknesses
    4. Thoughtful Communication
    5. On the Value of Conflict
    6. Looking at Your Own Plate
    7. Notes
  14. CHAPTER 10: Owner, Manager, and Leader
    1. Defining Owner, Manager, and Leader
    2. Management
    3. Leadership
    4. Note
  15. CHAPTER 11: Adding Owners: The Firm's Perspective
    1. Criteria for Ownership/Partnership
    2. Admission Process
    3. Adding Family Members as Partners
    4. Laying the Foundation for New Partners
    5. Tackling Buy‐In Financing and Valuation
    6. Onboarding Partners
  16. CHAPTER 12: Buying Equity: The G2 Perspective
    1. What Does It Mean to Be an Owner?
    2. Key Questions to Ask
    3. Should You Buy Equity?
    4. The Characteristics of Equity
    5. Understanding Your Ownership Agreement
    6. Small Firms and Family Firms
    7. Owner Compensation
    8. What If the Ownership Agreement Isn't Right for You?
    9. Understanding the Valuation and the Price
    10. Organizing Your Personal Finances
    11. Beyond the First Purchase
  17. CHAPTER 13: The Ownership and Governance Foundation for G2
    1. Career Investment
    2. Stability and Governance
    3. Elements of Governance
    4. Governance as a Function of Size
    5. Reviewing Your Governance Model
    6. Achieving Results
    7. Notes
  18. CHAPTER 14: Succession
    1. Different Aspects of Succession
    2. Internal Succession of Ownership
    3. Finding the Motivation
    4. The Big Transaction
    5. A Large Number of Small Transactions
    6. Passive Ownership
    7. The Intermittent Transaction
    8. Equity‐based Compensation
    9. Profits Interest Options
    10. Nonvoting Shares
    11. Synthetic Equity
    12. Mergers Facilitating Succession
    13. Creating a Lasting Firm
    14. Notes
  19. CHAPTER 15: Keeping Up with the Industry
    1. Being a Student of the Industry
    2. Developing Your Industry Connections
    3. Benchmarking Your Client Services
    4. Learning Best Practices
    5. Participating in External Training
    6. Contributing to the Industry
  20. CHAPTER 16: Conclusion
    1. From G2 to G3
    2. A Note of Optimism
  21. Bibliography
  22. About the Author
  23. Index
  24. End User License Agreement