The market for advisor practices was set to be a record year in 2020 based on closing 2019 out on a high note, with valuations and deal terms as good as they have ever been. Fast forward three months and COVID-19 has eroded all these gains and left many advisors reeling and re-evaluating. As an advisor thinking of phasing out over the next few months or years, you are probably thinking, “Great, now what?”

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:

Change is hard. No one likes it. So it is no surprise that so many advisers avoid the subject of succession planning. Both a Cerulli Associates study and polling by the Financial Services Institute found that almost 60% of advisers have not yet identified a successor. Yet every year more advisers get closer to their inevitable transition. An estimated $2.3 trillion in assets is controlled by advisers over the age of 60.

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As an advisor, at the end of a career, your business is your masterpiece – it’s your Picasso. It’s one of a kind, and in today’s market, you will not have trouble finding someone who wants to take it off your hands and pay you for it.

But, there is a huge difference in getting paid, and getting what your business is worth from the best possible successor for your clients. The majority of advisors will not obtain the best deal, and many may not even be selling to the best successor. There are four key obstacles standing between you and the best deal with the best buyer: