Gephyrophobia is the clinical term for a “fear of bridges.” In the wealth management space, we love bridges and rely on them (figuratively) to optimize our businesses every chance we get: bridges between clients and financial advisors, financial advisors and partner firms, and financial advisor business owners and their ultimate visions of success. These are the connections that drive achievement and satisfaction.
Because connecting potential buyers and sellers is a more complex – and less frequently executed – endeavor, it isn’t usually considered in the same light. But it should be. No matter where you fall in the process – either growing your business inorganically, positioning yourself as a potential successor in a larger firm or extracting value from your business when you’ve set a timeline to begin your next chapter – making a move can be a convoluted and potentially time-consuming journey. Getting it right is all about making the right decisions, at the right time, and leveraging the right resources every step of the way.
In theory, if you are a financial advisor looking to buy or sell, and you know what you are looking for, it should be easy enough to find a potential suitor. In reality, this is too important a decision, with too many complexities, to enter the process alone and unprepared. Doing so can prove to be a waste of energy, time, money and – when it comes to clients – goodwill. This is true during every stage of the business cycle, from start-up to sale. With the average age of financial advisors in the U.S. approaching 60, the reverberations of bad decisions for professionals exiting the business can have negative impacts both personally and industry-wide. That’s why starting the process early and having the correct resources at your disposal will help to ensure an optimal outcome for buyer, seller and clients. For buyers looking to grow via acquisition, the stakes are equally high. A bad fit – culturally, financially or geographically – can derail a long-term business plan pretty quickly.
Finding the right deal is rarely a matter of skill, intelligence or acumen. It’s a matter of expertise, experience and access. As the wealth management industry evolves and new deal structures, new expectations and new players – think PE – alter the landscape, traditional approaches to making a move no longer work.
The demographics are telling: The average age of financial advisors is 58. More than 70% of advisors do not have a succession plan. Equally telling are the numbers of advisors who are looking for a change. Each year, approximately 50,000 advisors consider leaving their firm in search of greener pastures. A good number of them would love to kill two birds with one stone and combine changing firms and becoming a successor.
When searching for the right buyer or seller, it is important to leverage both technology and consultative expertise. Our new Bridge Marketplace delivers on both. We deployed decades of experience to create a search engine that allows users to filter potential prospects using the criteria that matter most to them, including: geographic location, timeframe, recurring revenue, AUM and more. Our team’s consultative expertise complements the platform’s functionality and can help drive an effective and mutually beneficial transaction for all involved.
Bridgemark Strategies brings over a century of combined experience to evaluating and strategizing transactions on behalf of financial advisors.