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Corporate need for succession program in the BD/FMO space


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Corporate need for succession program in the BD/FMO space

  1. 1. Why Succession Planning is crucial for the Independent BD and FMO/IMO
  2. 2. Situation Analysis Today’s Reality:- • Advisors and Income are out of balance. 80/20 distribution ! • Advisors are ageing and lack motivation to proactively plan. • Potential for Chaos and Confusion for clients and the channel. Change the Dynamic:- • You have the opportunity to be the voice of reason, the arbiter of common sense and lead from front. • Younger agents/advisors are encouraged and their firms growth accelerated through absorption of retiring advisor assets. • It is a powerful recruitment mechanism.
  3. 3. Today. Income vs. Producers Producers – The Rest ! Top Producers INCOME INCOME 80% 20% 80%20%
  4. 4. The Risks. Income vs. Producers Producers Top Producers INCOME INCOME - Shrinks Fixed Costs Retiring Clients/Income Migrate Away Growing Income Gap
  5. 5. Top Producers DoJ or New Comers Growing or Stagnant Income Risk 10% loss of Top Producers has a disproportionate impact on the loss of revenue and Income DoJ = Dead on the Job. Leave well alone.
  6. 6. Top Producers DoJ or New Comers Growing or Stagnant Students No desire or reason to educate Hit the Glass Ceiling Lost ! Broken Organization New Comers Little or No professional interaction amongst the various groups
  7. 7. Control the Transition. Make the Issue an Opportunity !
  8. 8. Top Producers DoJ or New Comers Growing or Stagnant Students Experienced/ Educators Growing benefit from Mentors Much to Learn The Optimal Organization New Comers Focus Succession program on a select group with key traits to create a continuum of progression within the organization.
  9. 9. Jack(60) - $500k Tom(35) - $200k Arron(45) - $8.7M Tom joins Jack as an equity partner and possible successor Jack and Tom sell to Arron – a dynamic well managed firm. Arron merges/buys James as part of James Succession plan. Arron(45) - $3.0M James(66) - $5.0M The Optimal Cycle • Asset Loss = $0.00 • Aspirational for other reps • Success Breeds Success Tom(35) - $200k Name (Age) - $Production
  10. 10. Group Dynamics • Determine personality traits of Top Producers and key up and comers. • Understand an individuals degree of ambition • a Resource worth knowing • Look for common ground. – Geography – Demography • Map likely succession opportunities
  11. 11. Tiers of Participation 1. Offer connection to a series of service providers who have expertise in valuation, planning, and succession execution. 2. Pro-actively engage the agents in the discussion – focused on those who have the greatest impact on the FMO and the show the greatest potential benefits. 3. Provide a finance component that speeds the rate of deals and promotes succession under a managed program.
  12. 12. Succession • Lead from the top and provide a structure and flexible program model. • Provide a Service to Agents. – Recruitment and retention tool. • Protects the BD/FMO strategically for the longer term. • Encourages best practices throughout the organization. • Will change the industry over time and create longevity.
  13. 13. Eighty20 Tel: 970 325 3820