Advisor Succession Plan: Inside a Real-Life Succession Plan
Why an Advisor Succession Plan Matter Real-Life Advisor Succession Plan: Lessons From Start to Finish is a complete, real-world case study showing how one multi-advisor firm moved through every step of a true advisor succession plan. You’ll see how the team handled valuation, financing, ownership changes, and client transitions from beginning to end—making this a practical example of a succession plan from start to finish. This session is built for financial advisors and firm owners who want proven, experience-based guidance. You will learn how to reward key team members, protect business value, structure a smooth transition, and prepare for a confident exit. You’ll also hear lessons from a real-life advisor succession plan that you can apply whether you’re planning an internal sale, grooming successors, or preparing your firm for the future. Speakers Host Parker Finot Director of Transaction Advisory Services Paper-plane Linkedin-in Guest Chris Pazienza Retired Owner/Advisor of Horizon Wealth Partners Guest Patrick Carpenter, CFP®, BFA®, MCEP® Advisor & Partner of Horizon Wealth Partners
Protecting Your Practice Against the Unexpected – David Grau Jr.
Access the Slides From the Session Download View our 2025 M&A Infographic Download Schedule a Call With Our Team Download Founder / CEO Paper-plane Linkedin-in Twitter Areas of Expertise: Advisor SuccessionSmall Business SuccessionFamily Business TransitionM&A Tax Strategies, NegotiationFinancing, Financial AnalysisRIA and IBD Rep Valuation, Continuity/ContingencyAdvisor M&A, Business PlanningRIA Buy-Side & Sell-Side Representation David Grau Jr., MBA David Grau Jr. is the founder and CEO of Succession Resource Group, a succession and M&A consulting company for advisors. Prior to launching SRG, David was the leading M&A consultant for a well-known succession planning firm to advisors where he led and developed numerous programs for RIAs. Prior to this role, David served in the United States Navy. David is a published author and accomplished speaker and has been interviewed and cited in dozens of publications over the last decade. He is currently one of the leading speakers in the financial services industry on M&A and next-gen building strategies, with over 200 presentations to his credit. In the past five years, he has spoken at a variety of the industry’s leading firms, including LPL Financial Services, Wells Fargo, Ameriprise Financial, ING, Independent Financial Group, Geneos, Swan Global, Advisor Group, Fidelity, Jackson National, Prudential, Raymond James, and regularly volunteers his time speaking for the Financial Services Institute (FSI) and FPA chapters around the country. David holds a Bachelor’s Degree from Portland State University and has a Master’s Degree from Willamette University’s Atkinson Graduate School of Management. David, his wife Kristen and their three children are long-time residents of Portland, Oregon, but take every opportunity to travel. Fun Facts: David enjoys spending time with his family, reading, running, is an avid wine enthusiast and developing a taste for cigars, loves traveling, reading, he also enjoys snow and water sports and loves basketball (playing or watching). Prior to having three children and starting a business David had a beautiful head of hair. Now he doesn’t.
Selling a Book of Business as a Financial Advisor | Complete Guide
Selling your book of business is one of the most significant financial decisions you will make as a financial advisor. Whether you are approaching retirement, exploring a strategic exit, or simply looking to capitalize on favorable market conditions, understanding the full process, from valuation to buyer selection to client transition, can mean the difference between a smooth, profitable handoff and leaving value on the table. The timing matters more than most advisors realize. Over half of active financial advisors are over age 50, and many still lack a formal succession plan. As retirements increase and deal volume continues to rise, consolidation across the wealth management space is accelerating. Rising taxes and interest rates, tighter regulations (think Reg BI), tech demands, and fee compression are all adding pressure and shrinking margins. For many advisors, this creates a tipping point, prompting them to explore exit options or sell their book of business. Adding to the urgency, private equity has become a major force in advisor M&A. PE-backed buyers are driving up headline valuations but often on less favorable terms for sellers — smaller cash down payments, more earn-outs, and equity in the buyer’s firm. Understanding this dynamic is critical to evaluating any offer you receive. In short: sellers will be plentiful, and timing will matter. This guide walks you through the full process of selling a financial advisory book of business, including when to sell, how to determine what yours is worth, how to find the right buyer, and how to protect your clients and your legacy along the way. When Is the Right Time to Sell? Timing is everything when it comes to selling your book of business, but the right time is not always obvious. Personal circumstances are rarely in perfect alignment with market conditions. Simply “wanting out” does not necessarily mean it is time to sell. If your revenue is declining, you just lost your largest client, or you have made major internal changes, you may not get the value you are hoping for or expecting from the financial advisory practice you have built. Retirement is an easier scenario for many advisors. If you set a target date a few years into the future, you can take the necessary steps to ensure you have maximized the value of your financial practice and positioned yourself to attract the best suitors. SRG’s succession planning engagements are specifically designed to help advisors build that runway. That said, you do not need to be on the verge of retirement to sell. Some advisors sell during a period of strong growth specifically because a growing practice commands a higher multiple. Others sell a portion of their book to reduce workload while staying active. The key is to sell from a position of strength rather than necessity. A few signals that the timing may be right: Your revenue has been stable or growing for at least two to three consecutive years You have recurring, fee-based revenue that makes your book predictable for a buyer Your client base skews younger (under 65), giving the buyer a longer revenue runway You have documented processes and systems that can transfer to a new owner You have started to think about what comes next — whether that is retirement, a new venture, or a reduced role If several of these apply, it is worth starting the conversation, even if you are not ready to list today. Preparation alone, understanding your valuation, cleaning up your operations, and exploring options — typically begins three to five years before the planned exit, though the most successful transitions start even earlier. According to SRG’s transaction data, the average succession plan spans 6.5 years. How to Value a Financial Advisor’s Book of Business Before you name your price, you need to understand how buyers are actually sizing up your business. The two most common valuation methods for financial service businesses are a market-based valuation using comparable transaction data and an income-based valuation that focuses on the business’s ability to generate profits. Neither of these is the correct solution 100% of the time; the best approach depends on the circumstances and size of the parties involved. Most sophisticated buyers will use more than one method. One important trend: as practices grow larger and more complex, valuations are increasingly based on earnings (EBITDA) rather than revenue multiples. Advisors planning an exit in the next few years should be paying close attention to their profitability, not just their top-line revenue. Revenue Multiplier Method The most widely referenced approach. Take your trailing twelve-month revenue and multiply it by an industry-standard factor. For RIAs and advisors with recurring revenue, that multiplier typically falls between 1.6x and 4.4x. When buyers outnumber sellers, it is common to see a well-positioned practice that has been prepped for sale exceed 3.0x on recurring revenue. In 2025, 39% of practices that transacted received a recurring revenue multiple of 3.5x or higher, according to SRG’s annual transaction data. Regional multiples ranged from 3.17x in the South to 3.48x in the Midwest — a tighter band than many advisors expect. What pushes you toward the higher end: strong recurring fee-based revenue, a younger client base, clean operations, and consistent growth. What pulls you toward the lower end: heavy reliance on commission-based income, an aging client book, or declining revenue trends. Earnings-Based Valuation (EBITDA / SDE) This method focuses on profitability rather than top-line revenue. Buyers look at earnings before interest, taxes, depreciation, and amortization (EBITDA) — or seller’s discretionary earnings (SDE) for smaller practices. For most practices, the industry standard multiplier is typically 4 to 8 times annual earnings, including reasonable owner’s compensation. However, larger firms with strong margins and sustainable growth are commanding multiples well above that range — SRG’s 2025 transaction data showed an average EBITDA multiple of 9.98x across the deals it tracked. This method is more common when the buyer will be assuming the seller’s overhead, and it is more reasonable to use a valuation method that focuses on profitability versus
What’s the Deal with PE and Aggregators! (Ep. 23)
Watch the Replay Related Resources 2025 Advisor M&A Report Check Out our Press Release→ Succession Readiness Checklist Check Out the Checklist→ Selling Your Practice with Expert Advocacy Watch the Replay → Grab A Valuation We offer a variety of solutions and turnaround times to fit your needs. Join myCompass Our membership club grants you inside tips and opportunities to grow. Review our Seller Services We’re here to ensure you secure the best buyer, price and terms.
Breaking the Cycle | Compensation Strategies That Protect Value & Drive Growth
Valuation expert Ryan Grau, CVA, CBA, and compensation strategist Julia Sexton, CVA, reveal the most common comp mistakes—and how to fix them. Learn how to build pay models that drive growth, retain talent, and preserve business value. Watch the Replay Host Julia Sexton, CVA Director of Strategic Organizational Planning Paper-plane Linkedin-in Host Ryan Grau, CVA, CBA Director of Valuations Paper-plane Linkedin-in
5 Must Have Items for Your Equity Grant Plan
Granting equity is one of the most impactful — and complex — decisions a business owner can make. SRG’s “Top 5 Must-Have Items in Your Equity Grant Plan” infographic outlines the essential elements every advisor should include to protect, structure, and maximize their firm’s value. From corporate authorization and valuation to vesting terms and share class, this guide simplifies a process that can otherwise be overwhelming. Whether you’re granting equity for the first time or refining your existing plan, this resource ensures you’re covering every critical detail. Download the infographic today to learn how to build a strong, compliant equity plan that supports growth, rewards key talent, and safeguards your firm’s future. Please enable JavaScript in your browser to complete this form.Please enable JavaScript in your browser to complete this form. Name * FirstLast Phone Work Email *How Did You Hear About SRG? *— Select Choice —ConferenceDirect MailExisting/Past ClientGoogle AdWordsOtherReferralSocial MediaSeminar/WorkshopWebinarWebsite Download
Executing A Successful Internal Succession Plan In The Private Equity Era Of Advisor M&A
Watch the Replay Related Resources 2025 Advisor M&A Report Check Out our Press Release→ Succession Readiness Checklist Check Out the Checklist→ Selling Your Practice with Expert Advocacy Watch the Replay → Grab A Valuation We offer a variety of solutions and turnaround times to fit your needs. Join myCompass Our membership club grants you inside tips and opportunities to grow. Review our Seller Services We’re here to ensure you secure the best buyer, price and terms.
Webinar Questions
Have questions about the upcoming webinar? We encourage you to share your thoughts, ideas, or any questions you have ahead of time! Whether you’re curious about the topic, looking for more in-depth insights, or just seeking clarity on something specific, we want to hear from you. During the live event, we’ll do our best to address as many questions as possible. Our goal is to make the session as interactive and informative as possible. However, if we can’t get to your question during the webinar, don’t worry—we’ll make sure to follow up with you personally via email afterward. Your input helps us make our webinars even more valuable, so don’t hesitate to reach out. We appreciate your engagement and look forward to discussing your questions and thoughts!
Sample Valuation Reports
Our Sample Valuation Reports We provide sample valuation reports to give prospective clients a clear view of the quality, structure, and insights they can expect from our work. These examples demonstrate our thoughtful, thorough approach to each engagement and highlight how we tailor our analysis to the unique context of each business. They’re designed to build trust and help clients understand the value we bring to the decision-making process. Sample Starter Valuation Download Sample Premium Valuation Download Sample Elite Valuation Download
Why RIAs are Giving Synthetic Equity a Hard Look
March 28, 2025 First-generation RIA owners like those at CGN Advisors increasingly use synthetic or phantom equity structures to give employees access to a firm’s growth while deferring actual ownership. Justin Nichols, managing principal at CGN Advisors in Manhattan, Kan., and his two partners were looking for ways last year to give employees access to the firm’s growth without the “complexities” of making them owners or asking them to pony up what would be steep buy-ins. With the help of a consultant, they decided to set up a program to provide so-called “synthetic” or “phantom” equity, in which employees are guaranteed a share of the firm’s growth at a future date or around a triggering event, such as a sale of the firm, a founder leaving or the firm merging with another RIA. Similar to a deferred compensation program, such as when publicly traded companies issue restricted shares, the setup can also provide a pathway for a younger advisor to eventually put accrued equity toward purchasing a stake in the firm. “We have a bunch of great employees, and we really want to retain them,” Nichols said. “This was another tool in the toolkit to retain and even attract talent in the long term.” According to Nichols, the competition for RIA talent in Manhattan, Kan., is no joke. The firm of 16 people with about $1.6 billion in client assets is located about 45 minutes from Overland Park, Kan., home to mega-RIAs including Creative Planning and Mariner. David Grau, CEO and founder of Succession Resource Group, worked with CGN on the program. The succession consultant said he has been advising on synthetic equity structures for larger RIA firms for years but that it has more recently moved downstream to smaller RIAs. “Now, we’re working with five and 10-person teams, and they’re doing phantom equity,” he said. “They’re contemplating these equity structures that, 10 years ago, would have made their eyes roll into the backs of their heads.” Grau said the landscape has shifted to a place where advisors understand there is value in their firms that they can sell. However, giving ownership stakes, and often voting rights, is not always a fit, particularly if the owners don’t feel ready to cede those things to younger advisors. He said it can also go the other direction, by which a younger advisor doesn’t feel ready to put up a large share of cash to buy in but wants that opportunity in the future. “Talk about your quintessential golden handcuffs,” Grau said. “In an industry where we are all fighting to attract and retain great young talent, you can build a phantom equity plan where they can start to accrue $10,000, $20,000 or $30,000 worth of an equity balance.” The owners can also set the vesting schedule for the equity, meaning it can be flexible in terms of how long it will be illiquid for employees and when it will become a liquid asset. There are also clauses for payouts should an RIA sell to a private equity firm or some other triggering event occur. To be fair, Grau and other consultants are interested in these setups as well because they are complicated and require guidance. However, other consultancies reiterated that they have seen growth in interest and uptake for these types of deferred ownership programs as the RIA market has matured and continues to see waves of capital driving competition for talent. Real Growth Eric Leeper, CFO and principal with consultancy FP Transitions, said synthetic equity is still in its “relative infancy.” However, it is increasingly being used to solve RIA compensation structures that have historically been based on “eat what you kill,” where the advisor is often responsible for business development and serving clients. Today, Leeper sees two factors changing the efficacy of that model. One is that larger RIAs are running more like businesses—with advisors still wanting to be compensated well for their work—and new advisors, on the other hand, prioritizing financial planning and working with clients over business development. “There’s a major issue that the industry has with the division of the role of the advisor being a planner and the advisor being a salesperson,” he said. Advisories must set up structures such as bonuses or deferred compensation to move away from the “eat what you kill” model. The synthetic equity model can provide a middle ground while both owners and advisors prepare for real ownership. “You have an issue of affordability for next-generation talent at the company,” Leeper said. “This is where we really started to lean into synthetic equity.” Leeper said that equity is almost always based on a percentage. For example, a contract might offer 5% of company profits so long as the advisor is a member of the firm in good standing. To design the equity, however, a firm may target a capital value of, for instance, $100,000 five years out and calculate the percentage that would most likely get them to that amount. Leeper also noted the employees could gain a tax advantage from the setup, as synthetic equity is not taxed on issuance as company stock or capital ownership would be. The model, however, does come with some complexity. Synthetic equity structures are regulated under the Internal Revenue Service’s 409A, or nonqualified deferred compensation, which requires specific plan documentation and compliance oversight. On the positive side, Leeper noted, it does not show up as a “contingent liability” on the balance sheet of the issuing firm, as it would if it were a defined benefit or guaranteed payout. That can be particularly attractive for a firm that, at some point, may be looking to sell and wants to show buyers a strong bottom line. Recruiting Tool Brandon Kawal, partner with Advisor Growth Strategies, said his firm has worked with about 24 clients on synthetic equity programs over the past year. He ties the current interest in the structure partly to the aggregators backed by private equity money going after advisor talent at independent RIAs. “Compensation, and then