Critical Elements of a Continuity Plan

Not only does your practice represent years of hard work and dedication, it is also one of the largest assets you own. Yet less than 18% of advisors have a continuity plan in place. Many don’t know where to start and are overwhelmed by the thought of developing a continuity plan on their own. Although there are many turnkey continuity planning solutions available, it is important for advisors to know what should be included in their continuity plan.

An Important Lesson 2020 Has For Financial Advisors

2020 brought a series of unexpected challenges and rapid change, not just in the financial industry, but across the globe. So often we speak of planning for the unexpected, and 2020 certainly put that idiom to the test. Still, many advisors aren’t taking the necessary precautions to protect their practices, even in the face of a devastating pandemic. Recently, we lived through an experience with one of our clients who, luckily, did have a plan in place for their practice and who, very suddenly and quite young, died from contracting Covid-19.

The Pandemic is Raising the Need for Seller Advocates

The pandemic has brought with it many changes and a great deal of uncertainty in the markets. As a result, many older advisors are considering their options, including the possibility of selling their practice. Because of the uncertainty and dips in the market, many experts have been predicting bargains for would be buyers looking to make an acquisition. We disagree and believe that a seller can and should still get a reasonable return for the years they spent building their practice. But the pressure to sell now and sell at a discount is building in the market and highlights the need for seller advocates in advisor successions.

How the Corona Virus Will Impact Valuations

As a nation, we are experiencing challenging circumstances as a result of the Coronavirus that is quickly spreading across the globe. As an industry, many advisors are grappling with working and managing staff remotely while keeping clients calm and engaged. Practice leaders are feeling the pull of many new demands, coupled with their own concerns about how this will impact their practice now and in the future. We can’t know everything that the future holds, but we can look to historical data for insights, as well as our own experience and expertise to provide some guidance on how the Coronavirus will impact advisor valuations and M&A activity in the coming year.

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