Lions and Tigers and Succession Planning, Oh My!

By Jeff Jones, NAPFA Chair

Our members come from firms of all sizes, and solo and partnership practices no longer make up the majority of our member firms. Member firms include ensembles, mid-size firms, and some of the largest RIAs in the country. While some things are common across Fee-Only firms, others are more specific to the firm’s size. The echo I’ve heard so often through the halls of NAPFA is how solo to smaller firms need assistance with succession planning.

The waters are also muddied by the type of transitions to consider. Are you a solo looking to bring on a partner? How about an ensemble or mid-size firm using an internal transition from the first to the second generation (raises hand), and what does that internal transition look like? Are you considering a merger or interested in being acquired? Of course, there are in-betweens and other options.

Succession planning can make a firm principal feel like Dorothy in The Wizard of Oz. There's a golden path ahead, but it's full of dangers and mysteries. People say there's a wizard who has the answers, but how do you even get to where the wizard lives? It turns out that NAPFA can put you on that yellow brick road with numerous resources and partnerships. So where can you begin to pull the curtain back on the Great and Powerful Oz?

How NAPFA Helps with Succession Planning

NAPFA frequently hosts conversation circles, where succession planning has been a common topic. The circles offer an opportunity for you to hear from and share your experiences with other members. You can find this discussion in the recurring small-firm conversation circle as well.

MIX groups offer many benefits. Members should consider joining an existing MIX group focused on succession planning or starting a group with this focus. NAPFA will send an email on your behalf calling for members interested in a new group, and I certainly expect there to be interest.

For those who attend NAPFA’s fall or spring national conferences, you are almost guaranteed to find a session or two about succession planning; even better, these typically include Q&A opportunities. While in those sessions, I’d recommend you look around the room to find fellow attendees to speak with during one of the many networking opportunities.

Conferences also offer community meetings based on firm size: solo, mid-size, and large. Members in those sessions share their challenges and pain points, and succession planning is mentioned frequently. Again, identify those members and catch them for a conversation outside the session.

Recently, NAPFA and FP Transitions partnered to bring members a program that includes an annual comprehensive valuation report, an annual continuity plan, access to practices for sale, and access to a community-based continuity matching program exclusively for NAPFA members.

Also, the Advisor regularly tackles this subject. In this issue, you’ll find “9 Pitfalls of Internal Succession Planning—and How to Avoid Them” and “Transitioning a Firm from Founders to Successors.”

These are but some of the options where you can find more information, pull at threads, and ask your questions. You don’t even have to bring back the broomstick of the Witch of the West. Oh, and no flying monkeys!