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Proven Strategies Blog

2024-02-28 • 2 minute read

Exploring the non-proprietary nature of technical skills in the financial industry, this discussion shifts focus to the true value proposition of a financial professional: the ability to develop a lead generation engine. Highlighting marketing as the most challenging and rewarding aspect of client acquisition, it underscores the importance of creating systems and processes that ensure predictable, sustainable, and duplicable growth.

This is an excerpt from episode 54 of the "Always On with Duncan MacPherson' podcast featuring Ted Jenkin, CEO of oXYGen Financial and President of Exit Stage Left Advisors.

Stream the new episode of "Always On' by clicking here: paretosys.co/AODM_ep54

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2024-02-27 • 2 minute read

As a financial advisor, preparing for the sale of your practice is a meticulous process that demands consideration of many factors. Whether you're planning for retirement, exploring new opportunities, or seeking a lifestyle change, getting your house in order is key to a successful transition. The following is a comprehensive guide to help you navigate through the essential steps to prepare for the sale of your practice:

1. Get Your Financials Straight

One of the foundations for preparing for the sale is crystal-clear financial records. Your potential buyers will scrutinize your financials to assess the health and viability of your business. Utilize QuickBooks to maintain a clean set of records, including a detailed Profit and Loss (P&L) statement. Break down your revenue sources, such as asset-based fees, financial planning fees, commissions, and insurance.

Make sure to distinguish between business-related expenses and personal expenditures. Clearly demonstrate any add-backs that may not be considered ongoing expenses for the business. Ensure that your gross income accurately reflects the true revenue your practice generates, providing potential buyers with a transparent understanding of your financial position.

2. Skip the 1099's

Having 1099 contractors in your organization can be a red flag for potential buyers. To enhance the appeal of your practice, consider transitioning to W-2 employment contracts with your staff. Establish solid employment contracts with non-compete and non-solicitation clauses to protect the continuity and integrity of your client relationships.

By streamlining your team under W-2 contracts, you create a more cohesive and stable structure, presenting a positive image to potential buyers. This move can alleviate concerns about the potential departure of key team members after the sale.

3. Exit the Money Management Business

Consider divesting from the money management aspect of your practice, especially if it's not a significant value driver. Transitioning to a Pure Registered Investment Advisor (RIA) model with negative consent can simplify the sale process. This strategic move not only makes your practice more attractive to buyers but also facilitates a smoother transition of client assets.

4. Focus on Net Flows and Lead Generation

Demonstrate the value of your practice by showcasing strong Compound Annual Growth Rates (CAGR) and a robust lead generation funnel. Net flows - the difference between new assets gained and assets lost - can significantly enhance the perceived value of your business. Showcase your ability to attract and retain clients, emphasizing a sustainable growth trajectory.

Invest in a lead generation machine that consistently brings in new assets under management (AUM). A solid lead generation strategy can be a key differentiator and a major selling point for potential buyers.

5. Have a Succession Plan (G2 Plan)

Develop a comprehensive succession plan, often referred to as a G2 plan. This plan outlines how your practice will continue to operate seamlessly after your departure. Include details on key personnel, client transition strategies, and any ongoing support you may provide post-sale.

Having a well-thought-out G2 plan demonstrates your commitment to the long-term success of the practice and reassures potential buyers about the stability and continuity of client relationships.

In conclusion, preparing for the sale of your practice requires meticulous planning and execution. By getting your financials in order, transitioning to W-2 contracts, exiting the money management business, emphasizing net flows and lead generation, and having a robust G2 plan, you can enhance the appeal and value of your practice in the eyes of potential buyers. This strategic approach facilitates a smoother sale process and ensures the ongoing success of your practice beyond the transition.

If you're ready to explore the opportunity of maximizing some or all of your practice, contact JPTD for a consultation. 

- Article contributed by JPTD 

2024-02-26 • 2 minute video

Explore the transformative journey from competition to coopetition, where the quest for personal excellence transcends traditional rivalry.

For more on this, and other actionable best practices, download Chapter 1 of my book "The Blue Square Method" today at thebluesquaremethod.com

2024-02-23 • 2 minute video

Discover the pivotal strategies financial professionals must embrace to significantly enhance their enterprise value. Learn why recurring revenue is the cornerstone of a valuable practice.

This is an excerpt from episode 54 of the "Always On with Duncan MacPherson Podcast" featuring Ted Jenkin, CEO of oXYGen Financial and President of Exit Stage Left Advisors.

Stream the new episode of Always On by clicking here: paretosys.co/AODM_ep54

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2024-02-22 • 20 second read

Always On With Duncan MacPherson - Leaving No Stone Unturned: How to Maximize Your Exit Strategy with Ted Jenkin (Ep. 54)

Want to receive maximum value for the business you've worked so hard to build?

The key lies in being proactive with your exit strategy.

Dive into a thought-provoking conversation between Duncan MacPherson and returning guest Ted Jenkin, CEO of oXYGen Financial and president of Exit Stage Left Advisors. Together, they uncover practical insights to streamline your operations, improve client acquisition, and scale your credibility " ultimately garnering a higher multiple for your business.

They discuss:

  • The critical role of recurring revenue in enhancing enterprise value
  • Creating "proprietary" value as an advisor
  • Using client testimonials and online reviews to build trust
  • How to leverage AI for content creation (with a list of helpful resources)
  • How an exit plan helps you de-risk in the face of uncertainty and volatility
  • Navigating the HR and legal parameters of a sale
  • And more

Stream the new episode of Always On by clicking here: paretosys.co/AODM_ep54

We'd love to hear your thoughts on this episode or answer any follow-up questions. Please feel free to reach out!

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2024-02-21 • 20 second read

Did you miss Duncan MacPherson's webinar on how to achieve a work-optional lifestyle in five years?

If you did, you missed a lot of valuable insights and strategies on how to transform your business into a self-sustaining entity that gives you the freedom to choose when and how you work. But don't worry, you still have a chance to watch the replay of the webinar. 

Click here to watch: paretosys.co/work-optional-replay

2024-02-20 • 3 min video

Explore the pivotal questions that can transform your client advisory council meetings, from uncovering your firm's strongest assets to identifying unseen opportunities for growth in this short excerpt from episode 53 of the "Always On with Duncan MacPherson' podcast featuring Mike "Cy" Cajthaml Jr., Pareto Systems Business Advisor.

Stream the full episode of Always On here: paretosys.co/AODM_ep53

2024-02-16 • 1 min video

Ever wonder why clients are not referring? Find out in this short excerpt from episode 53 of the "Always On with Duncan MacPherson' podcast featuring Mike "Cy" Cajthaml Jr., Pareto Systems Business Advisor.

Stream my latest episode of Always On here: paretosys.co/AODM_ep53


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2024-02-13 • 2 minute read

Advisors have seen that Client Advisor Councils (CAC) can be extremely beneficial to the growth of their practice and for refinements to their process that they continue to make over time. As an example, I recently spoke with one of our consultants, Mike Cy, about one of his advisors who broke down their process for everyone on the Always On podcast I do weekly.

Mike explained that it was enlightening for him to be able to be there and see the process firsthand, especially with an advisor that he'd become fairly close with over a period of years. 

Many of the things that he and the advisor had been working on were brought out for many of his clients during their most recent council meeting. The feedback to the questions provided was very open and honest, and it was extremely beneficial. 

Looking specifically at the steps taken, they first sought to create predisposition and buy-in from the target clients, in part by getting them to see the value in participating. 

Then, through continued contact with his clients, they uncovered and confirmed that which clients were interested in creating something like an advisory council. It was explained as a way to get everybody together for a round table discussion about things that they enjoy about the experience that they're having with the advisor, and to dig up less-positive things that might be in the back of their minds, or unmet needs. The vital point, Mike pointed out, was that getting a client side view of the matter through smart questions made both the process better and the clients more satisfied in and appreciative of the advisor's process.

Too often advisors don't understand the basic questions that clients are - or should be - asking. "How would I want to be treated? How would I view these different services?" are important questions, but very broad, and often asked of the advisor only to themselves. 

What this advisor did was invite the initial group together for the first advisory council meeting. There were about 12 individuals on council, which is a good number. Too large of a group can make people concerned about being open and honest with their input.

Prior to the meeting, the advisor took the most important step; he sent agendas out to describe the topics and questions that were going to be discussed, allowing council members to prepare a bit and decide what their thoughts were. In-depth questions that matter to clients are the fuel that powers a working CAC.

To help you spark your own CAC, here is a list of specific core questions you can supply with your agenda, or mention during other communications, or use as a guide during the meeting itself. We'd suggest that you select up to 10 questions (but probably not more) to address at your Client Advisory Board meeting:

  • How did you come to select us as your advisor?
  • What's the one thing you value most about our relationship?
  • Have we met, exceeded or fallen below your expectations?
  • What one thing do you feel we should improve on?
  • Is there one thing you feel we do especially well?
  • Are we communicating with you enough?
  • Are the materials we send you of value?
  • How do you describe us to family members?
  • Have we done a good job conveying our full array of services to you?
  • Do you see the merit in us engaging a Value-Added Support Team?
  • Directionally, do you anticipate your needs evolving?
  • How often would you like to be contacted? (Remember, you are describing your ideal scenario so don't be shy)
  • Are there other value-added services you would suggest we add to our business?
  • How do you feel about our [new letterhead, new logo ideas, etc.]?
  • Have we earned the right for you to feel comfortable enough to recommend our service to a colleague?
  • Did you find this session valuable? Do you think it would be worth doing again?

Implementing a Client Advisory Council is more than a strategic move; it's a commitment to growth, a testament to the value you place on your clients' voices, and a step toward a practice that is not just profitable, but also aligned with the needs and aspirations of those it serves. As we continue to navigate the complexities of financial services, let's remain steadfast in our quest for excellence: Always listening, always evolving, and always placing our clients at the very heart of our journey.

2024-02-09 • 1 min video

It's about uncovering the real value behind your suite of services and ensuring your practice not only meets but exceeds client needs.

Stream the new episode of Always On here: paretosys.co/AODM_ep53

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