Success! What now?

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Your Wealth Management practice is thriving.  Your holistic, fiduciary approach has resulted in more clients and assets than you had ever planned for.  So, what now?  How do you position your firm to best meet the future needs of your clients and your practice? 

Will your organization and infrastructure provide scale and continue to grow?  Are you partnered with the right firms? Do you understand and know how to deal with today’s dynamic regulatory environment?  What about your succession plan/exit strategy?  These are some of the fundamental questions that need to be considered for the sake of both you and your clients.

You’ve built your AUM by helping clients accumulate assets. For many clients, it’s now time to pivot to an income distribution approach. The models and strategies you employed to build their wealth may not align with their new goals and objectives. Depending on the client, you may need to diversify their portfolio to include protection-based products to hedge against health and survivorship issues. Focusing on income is a different game requiring a more conservative approach ensuring your clients can get where they want to go and not run out of resources on the way.

As your practice grows, you need to ensure your organization and infrastructure grow along with it. “Scale” is a term that is thrown around a lot, but it really is just an indicator of how efficient you are. If you have a people intensive back-office, then as you grow you may need to continue to add resources to keep up. If you have scale, then you can absorb additional demands without adding resources. Scale can be achieved through a combination of organizational structure and technology. The right infrastructure with the right people. Bottom line: If your practice has scale then you can increase revenue at a faster rate than costs. That should be important to both you and your clients.

A vibrant practice is based on quality relationships. This is true not only for your clients but for all your business relationships as well. The relationships you need depend on your business model. 

Unless you are only offering managed money you may need a broker-dealer platform to gather and re-position assets. An Insurance Agency affiliation is necessary to meet client protection needs even under the auspices of a managed account. Compliance is a necessary part of your business model and usually a strong value-add of a B/D relationship. 

One question regarding these relationships should be - are they providing commensurate value for the revenue your practice is generating?   If the answer is no, then you should be comfortable having conversations with these firms discussing your concerns. Most would prefer to accommodate you and retain the assets rather than rebuild the AUM after you leave. There are also many firms that will allow you to have an independent RIA while supporting your transaction-business.      

Between things like the SEC’s Best Interest Regulations and Department of Labor Rule modifications doing business the right way continues to become more complicated. Not only must you be able to defend what you ultimately recommend to a client, but you also must be prepared to explain the things you did not. How you document your decisions is extremely important. With multiple states contemplating regulatory updates it’s not going to get any easier. As always, Good Compliance is good business.

You’ve worked hard for your clients and your family and built something special. What happens when you want to retire? How to value your practice effectively and accurately? Have you thought about succession? Do you sell your practice to an aggregator? A junior partner? Is it better to sell outright or transition? There are pros and cons to each option. There are many variables and personal nuances that need to be considered to determine what’s the right path forward for you.

We can help. GreenLine Consultants will work with you to help deliver your objectives. We are a team of senior-level wealth management industry veterans with proven ability to think strategically and execute practically. We’ve dealt successfully with these and similar issues and are here to help you.  Contact us today at  info@greenlineconsultants.com .