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Succession Planning for Financial Advisors: Building an Enduring Business, + Website by David Grau Sr.

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Chapter 7 Succession Planning Step-by-Step

Where to Start

Succession planning is not a singular event; succession is purposefully designed to unfold over the course of a career, and to be a continuing process beyond that point. Succession planning is as much a process as building a business is. Remember the definition from Chapter 1: A succession plan is a professional, written plan designed to build on top of an existing practice or business and to seamlessly and gradually transition ownership and leadership internally to the next generation of advisors. So, with all these pages behind you, where exactly do you start? Here is the definitive road map.

Start by gathering some basic but important information that will help you make informed decisions. These steps will also help your support team (CPA, attorney, succession specialists) assist you in making smart decisions based on your specific fact pattern and goals:

  1. Print out the past three years’ profit-and-loss statements (P&Ls) and balance sheets.
  2. Have your practice/business formally valued.
  3. Benchmark key operational data.

The last two of these steps will take about 45 to 60 days to complete, so get started as soon as possible. Remember this simple rule: quality in, quality out—you cannot obtain an accurate and useful valuation result by resorting to an online survey form. Do the job right. Completing the valuation questionnaire is going to take some work and focus, but accurately determining equity value and understanding ...

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