SW CARES Annual Conference - Business Planning by Rick peterbok

1. Business Planning
By Rick Peterbok

2. How Many Advisors Have a
Comprehensive, Detailed, Business
Plan that includes an Action Plan
for Implementation?

3. Planning Research*
• 7% have executed a successful plan
• 15% are ready to implement a plan
• 28% are refining their plans
• 44% said they are thinking about creating a plan
• 6% aren’t even thinking about having a plan
*Investment News Advisor Survey

4. Value of Business Planning*
• Better Results – Advisors with a plan have over 3 times
the revenue as those with an incomplete or no plan.
• Better Sale Value – 75% of Advisor firms with a plan have
a succession plan.
• Saves Time
• Less Stress
• Provides Clear Structure and Direction
*Investment News Advisor Survey

5. The Value of Your Advisor Business
Multiple of Gross
Year
Recurring Revenue
2000 2.00
2002 2.05
2004 2.10
2006 2.16
2008 2.30
2010 2.31
2011 2.33
*FP Transitions

6. Buy Out Terms*
2011
• Down Payment – 36%
• Balance/Performance Payment Schedule – 3-5 Years
*FP Transitions

7. The Value of a Transaction
Based Business
1 to 1.25
Times Gross Income
Minus Expenses

8. Preparing a Business Plan
• Establish Goals (specific • Office Needs
with Time Lines) • Geographic Location(s)
• Strategy • Skills Necessary for
• Elements of Business Success
Necessary for Success • Inventory of Current
(Do Yourself or Position
Outsource) • Competition
• Key People/Personal • Financials
Only A Partial List

9. Critical for Successful Business Plan
• Prove to Yourself it is Achievable
• Write Plan Narrative so Anyone Could Understand It
(Especially if needing financing or investors)
• Commit and Implement

10. Why Someone Doesn’t Plan?

11. Optional Business Planning Workshop
1:30 – 2:30

12. Broker Dealer
• Leadership and Staff
• What Products and Services can the Rep offer
• Professionalism
• Advisory Relationships
• Scalable Business Processes
• Technology
• Financials

13. Broker Dealer
• On boarding process for Reps
• What are the annual hard cost to the Rep
• How does the BD support the Rep/Client
• What is the Compensation Structure
• What are the terms and conditions surrounding recruiting
new Reps
• What are the OBA guidelines
• What is the compliance environment
• Is there a minimum production level

14. Broker Dealer
• How is the business processed
• E&O
• Email service
• Commitment to growth
• What types of check and balances will we have
• How will we communicate…for operations, compliance, and
financials
• How are audits handled
• Other…