Buying or selling a financial advisory practice involves careful consideration of various deal structures, each offering unique benefits for both parties. The outright purchase is often favored for its simplicity, allowing a single payment or structured financing to complete the transfer and establish clear terms for valuation and handover.
Another common structure, the gradual buyout, lets sellers retain majority ownership while the buyer assumes increasing responsibilities over time, fostering a smoother transition. In contrast, internal succession emphasizes long-term mentorship, preparing a junior advisor for eventual ownership through training and relationship-building with clients.
Advisors nearing retirement often use these strategies to secure their legacy and maximize their practice’s value. For advisors or firms unsure about structuring a sale, industry specialists can assist with valuations and guide the decision-making process.
Finsum: It’s also very important to get an accurate valuation estimate of your practice regardless of which method you settle on.
- succession planning
- retirement
- advisors
- LPL
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
