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Insights on optimizing negotiating power for firms in transition.
Registered Investment Advisors (RIAs) share one essential characteristic—they put their clients’ interests above all other concerns. While this client-centric approach is the hallmark of RIAs, it’s important that firms and advisors plan for their own futures as well. Developing a succession plan is one of the most important activities RIAs can undertake.
As part of our mission to help advisors succeed, we partnered with Institutional Investor to conduct a research study to explore RIAs’ succession planning practices and concerns. 162 RIAs were surveyed in conjunction with a series of interviews with RIAs and valuation consultants to gather additional insight into the survey findings. The results of our survey indicate that the RIA industry looks to be at a major inflection point. A significant number of RIA firms are contemplating a change in ownership over the next five years.
However, the survey also finds that many firms are woefully underprepared when it comes to planning for the transfer of stewardship of their firms.
Keys to Successful Succession Planning for RIAs
Download DownloadVeteran consultants believe that succession planning should begin at the founding of a firm, can take 3-5 years to solidify, and should be updated continually. A lack of readiness can undermine a would-be seller in numerous ways.
Sellers who haven’t emphasized succession planning are coming to the negotiating table unprepared. In doing so, they are at risk of suboptimal outcomes for their firm as well as for the future of their clients and employees. And, they may struggle to secure the best terms and receive full valuation on an otherwise attractive firm.
This raises the question: What do RIA leaders need to do now to ensure the survival of their legacies?
This white paper outlines insights on optimizing negotiating power for firms in transition, including:
We hope this research is helpful to you as you plan for the future of your firm.
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice.
The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. All investments involve risks, including possible loss of principal.
Data from third party sources may have been used in the preparation of this material and Franklin Templeton ("FT") has not independently verified, validated or audited such data. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments opinions and analyses in the material is at the sole discretion of the user.
Products, services and information may not be available in all jurisdictions and are offered outside the U.S. by other FT affiliates and/or their distributors as local laws and regulation permits. Please consult your own financial professional or Franklin Templeton institutional contact for further information on availability of products and services in your jurisdiction.
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