Internal Transitions

Internal transitions

How Do You Rationally Transition Ownership To Your Successors?

Every wealth management firm needs a succssion plan tailored to the unique objectives and timelines of its owners.

It’s difficult. Clients deserve the peace of mind that their wealth manager will continue to provide high-quality, independent advice long after the first generation of owners has retired. Founders and senior shareholders recognize the issue but resist selling their equity unless they receive a fair price. At the same time, successor professionals want to become owners but have little personal investable capital.

Selling Equity at a Fair Price
The source of the challenge is that wealth management firms typically are worth far more than their successor professionals can ever afford to pay. FN provides a two-part solution. First, we personally lend your successors money to finance their purchase of as much equity as possible.

Second, we make a minority investment in your firm, filling the gap between its fair value and the amount successors can afford to pay over time.

Preserving Independence
Our structure allows wealth management firms to remain independent indefinitely. Successors gradually acquire both the preponderance of the equity ownership and voting control of the firm.

Customized to Fit Each Firm’s Unique Needs
Every wealth management firm needs a succession plan tailored to the unique objectives and timelines of its owners. Some owners may be on the verge of retirement. Others may plan to remain active indefinitely but, nonetheless, want to begin the process of selling equity internally. Consequently, our internal transition structures are customized to meet your needs.