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About SRG

Succession Resource Group is a boutique succession consulting firm based in the Pacific Northwest, serving clients across the country. SRG was founded by David Grau Jr., MBA in 2012 after nearly a decade of helping advisors with valuation and succession planning. SRG's team of experts leverage their industry expertise, combined with best-in-class resources, to help advisors, agents, and accountants manage the equity in their businesses...

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10 min read

Selling a Book of Business for Financial Advisors

By David Grau Jr. on Jun 29, 2021 11:08:20 AM

There are multiple reasons to believe that the number of mergers and acquisitions in the wealth management space will be high in the next five to ten years. To start with, over 50% of active financial advisors are over age fifty. Many of them will be looking for an exit strategy. Combine that with the fact that very few advisors have a succession plan and the increased deal volume year-over-year recently and it is reasonable to expect more consolidation short and long-term.

Topics: Seller Building Value/Business Valuation building value
3 min read

Building a More Valuable Practice - Tip #4

By David Grau Jr. on Jan 13, 2020 4:23:10 PM

AGE MATTERS

Age matters – we all hope it doesn’t, but the reality is that the age of your clients and their corresponding assets can have a drastic effect on the value of your business. An aging business is a dying business in the eyes of a buyer who is considering the long-term buying potential of the your book of business. One of the most important things to increase the value of your business, and one of the most difficult items to change, is the age of your clients and the amount of multi-generational planning that takes place in your company.

Topics: age matters Erik Pahlow Maximizing Your Practice's Value Building Value/Business Valuation financial advisors valuation valuation expert Building a valuable practice David Grau Jr FA CMA Valuation Maximizing Potential advisors age of clients Asset Growth building value SRG Blog Succession Resource Group Valuation Tip
2 min read

Building a More Valuable Practice – Tip #2

By David Grau Jr. on Jan 13, 2020 4:00:00 PM

Not All Revenue is the Same

There are many ways to grow your practice – the most obvious being adding more revenue, more assets and/or more clients. However, not all revenue is created equal in the eyes of a buyer, and not all revenue has value. The key is to ensure your revenue is predictable, and this can take place in a variety of ways for both recurring revenue sources (fees, 12b-1s, renewals, and trails) and transactional sources. Regardless of source, buyers will pay a premium for predictable cash inflow.

Topics: predictable revenue Building Value/Business Valuation financial advisors valuation David Grau Jr FA CMA Valuation Not all revenue is the same recurring revenue advisors building value SRG Blog Succession Resource Group Valuation Tip
3 min read

What to Expect When You Sell Your Business

By David Grau Jr. on Dec 19, 2019 5:59:41 PM

Selling a business, in any industry, is a major endeavor with far reaching implications for a wide variety of stakeholders. The first question for most owners is timing - "When should I sell my business?" This is both a personal and financial decision. If your intent is to sell to an internal successor you have or will groom, you will need significantly more time and resources than a sale to a peer/competitor. Internal transitions should start planning at least five years prior to the owner's planned retirement, where a sale to a peer might only require 3 to 5 years of transition time for the optimal results (from start to finish). Regardless of who you sell to, and when you decide to do it, here are a few important items, that if you keep in mind throughout the process, will produce a better result for everyone:

Topics: Building Value/Business Valuation selling Succession Plan Blog
5 min read

Three Ways to Build Value in Your Advisory Practice

By David Grau Jr. on Nov 8, 2019 10:23:24 AM

As an advisor, you provide tremendous value to your clients every day. But, what is often overlooked in the advisor-client dynamic, is the value they provide to you. That is, beyond the fees or commissions they pay you for your service, products or advice, your clients are providing you “value.”

Topics: Building Value/Business Valuation Blog Valuation Tip
4 min read

Revenue Sharing: Variable Comp and Your Value

By David Grau Jr. on Mar 7, 2016 11:34:32 AM

We recently spoke with an advisor who generated $10.5 million in annual revenue and was contemplating the sale of his business. Like many, he expected a premium sale price/valuation given the size of his operation, his radio show that generated a consistent stream of new business, and being located in a very desirable market. Surely his business was worth the $30 Million he was expecting, right? The unfortunate part of the story is that, even though he had built a large “enterprise” and was the sole owner, he compensated all of his employees on an eat-what-you-kill (EWYK) model paying them a percentage of gross revenue for the book they serviced, leaving only a fraction of the total gross revenue to the owner (approximately $500K annually). Not exactly what you would expect from a $10.5 million business and would make a $30 million asking price seem ludicrous given the free cash flow.

Topics: Building Value/Business Valuation Blog
3 min read

Building a More Valuable Practice - Tip #3

By David Grau Jr. on Oct 6, 2015 12:58:47 PM

Tip 1  |  Tip 2  |  Tip 3  |  Tip 4

Growth is King

One of the most important drivers of value in any business is growth. Historical growth, while no guarantor, is a useful proxy/tool for projecting a business or asset’s ability to produce revenue in the future. As a buyer, you will pay more for a practice that is growing each year than one that is getting smaller. One of the biggest mistakes advisors/reps/agents make is waiting too long to sell their businesses, often having contemplated selling for several years before they finally made the decision. By the time many decide to actually sell the business, they have been coasting for a few years, causing their growth to stall or even decline – making it a suboptimal time to sell. For financial service practices, growth of the business can happen in three specific ways. Anyone contemplating selling their business, or a buyer looking at practices to acquire, should pay attention to the following growth metrics.

Topics: Revenue Growth Building Value/Business Valuation financial advisors valuation Client Growth David Grau Jr FA CMA Valuation Growth is King advisors Asset Growth building value SRG Blog Succession Resource Group Valuation Tip
3 min read

9 Tips to Prepare Your Business for Sale

By David Grau Jr. on Mar 2, 2015 12:18:48 PM

Depending on what source you look at, the average age of an advisor in the financial services industry is anywhere from 51-57 years old. While that would typically leave plenty of time until the average age of retirement, the average age of an advisor selling their business is much younger, most often occurring near age 59. This is due in large part to the long-term seller involvement that is ideal in the sale of a professional services business, ranging from as low as 12 months to as long as 5 years. While you may not sell your business, you will leave this industry – planned or unplanned. The better prepared you are for your eventual transition, the happier your clients will be with the process, and the more you are likely to get out of it (financially and emotionally).

Topics: advisor Erik Pahlow Grau Sale Acquisition Building Value/Business Valuation financial advisors Sellers Succession Plan valuation David Grau David Grau Jr Pahlow advisors buyer prepare for sale SRG Blog Succession Resource Group
2 min read

Building a More Valuable Practice – Tip #1

By David Grau Jr. on Feb 18, 2014 12:00:06 AM

Tip 1  |  Tip 2  |  Tip 3  |  Tip 4

There are many ways to grow your practice – the most obvious being adding more revenue, more assets and/or more clients. The most valuable businesses in the industry however focus on building value in their enterprise every year, in addition to growing the revenue/asset base. There is a long list of recommendations that we would make as your succession/valuation consultant and the easiest way to understand these recommendations is to look at your business from a buyer’s perspective. When a buyer evaluates a business for purchase, there are many items reviewed in due diligence that drive or detract from the value, including the revenue sources, growth rate, age of the clients, location of clients, client service process and many others. Here is our first tip in this series of how to Build a More Valuable Practice:

Topics: Relationships Building Value/Business Valuation financial advisors Succession Plan valuation David Grau Jr FA CMA Valuation advisors building value SRG Blog Succession Resource Group Valuation Tip

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