The decision to form an entity structure for your financial practice is a critical step for experienced independent financial advisors. Many advisors address this topic after a specific need for it has arisen, but addressing it proactively allows you to establish the right structure with less stress and take advantage of numerous other benefits along the way. This article highlights the signs indicating when it's time to establish an entity and the risks associated with not doing so.

If you follow us on social media or are a subscriber to our monthly newsletter, you’ve heard about the most recent update to our one-of-a-kind client servicing platform, myCompass. Our latest and largest expansion now facilitates all services that SRG provides to clients, ensuring a streamlined and secure experience. Since these updates are still fresh, let's dive into the benefits of myCompass and how it can take your projects with SRG to the next level.

If you’re showing up to virtual presentations or conferences, you’ve likely noticed a recurring topic that's been buzzing around the industry: teaming up and preparing for a potential merger. Hopefully, you’ve sat in on a few of these discussions, and if you’re reading this you’ve probably considered a teaming scenario to some extent. Many advisors we’ve worked with find the concept intimidating, however, with the right approach and some careful planning, you can navigate this process like a pro. So, let's dive right in!

You’ve decided to put your exit strategy in motion. Maybe you’ve identified a buyer, or you’re considering multiple successors who’ve expressed interest in your practice, or you just decided an hour ago that now is the time to sell. At whatever stage you’re in, your top priority is to protect your clients and deliver a smooth transition that they’ve come to expect after years of working with you. 

Most experienced business owners understand valuations as an essential tool to assist in making critical decisions for their advisory practice. Unfortunately, many advisors will invest time and effort in getting their practice appraised, only to find out that the underlying analysis is irrelevant to the specific purpose of the valuation.

For anyone who has siblings, or is raising siblings, you might be familiar with the “Fair Share” tactic. Two siblings are told to share the last cookie in the jar. One sibling is tasked with splitting the cookie, while the other gets to choose which half of the broken cookie is theirs to enjoy. Doing so ensures that each sibling gets a fair share of the treat, despite their personal interest, with minimal bickering in the end.  

Many companies have spent significant time and effort in recent years to move away from the traditional one-size-fits-all type compensation plans and instead favor a more customized solution. However, the challenge to achieve desired results in attracting and retaining talented workers, within company means, remains prevalent. While at times the issue may be poor job role, poor culture fit, or external circumstances beyond the employer and/or the employee’s control, more often than not the lack of success is the result of a misalignment of the compensation plan with the worker’s role in the company and incorrect implementation practices.

Most of these occurences can be avoided if the following best practices are maintained:

Hiring and retaining talented employees is a top priority for most business owners. Effectively doing so has become increasingly difficult in the financial services industry. The number of advisors approaching retirement and exiting the industry far outweighs the number of new advisors joining. This gap is further exacerbated by the Great Resignation. As a result, organizations are struggling to find the human capital needed to grow their business and plan their internal succession.  

Whether you are just starting out as a financial advisor or you are simply looking to expand your established business, buying an existing book of business could be the right move for you. Opportunities for business acquisitions are becoming ever more common, as the average age of many financial advisors edges closer to retirement.

As an incentive to motivate hard-working key employees, private employers can issue phantom stock, also known as “shadow stock,” as equity compensation. While the value of these phantom shares will rise and fall in line with the company’s stock, the employee will not gain any actual ownership over the company or minority shareholder rights.