Will Your Business Die With You?

By Jerry Butler

Lack of proper planning means you are messing with you and your estate. If you “have” to sell your business will fetch half of today’s value – if you’re lucky.

  1. Equity and Income

Every advisor has two forms of income. One is employment income and the other is a return on the equity of the business. The current owner can sell part or all of their equity but continue to earn an employment income. Almost all deals will have the vendor negotiating an employment contract.

  1. Clients want to know what happens to them

Chances are that clients are already asking the advisor what happens if they are not around. A Plan will be received positively by clients.

  1. Business Structure

Many advisors have not properly structured their business to take advantage of the benefits of a share sale. Either they are not incorporated or the corporation is off side. Now may be the time to start getting ready to transition. Selling is a process. Often the initiation of a buyer starts the preparation of getting ready to sell.

  1. What stage is their business?

As advisors age so do their clients. In addition, most senior advisors are slowing down and their business is probably not growing. If your clients are aging and your business is “mature” it is becoming less valuable every single year.

  1. A Succession Plan is not an Exit Strategy

Most advisors think they sell when they are ready to exit the business. This is not the case. Every deal Queenston has done has given the seller an employment contract. Many sellers continue to earn an above average income.

  1. Monetize their largest asset

Many advisors have personal debt and have the opportunity to wipe that debt out or increase their liquid savings.  If an advisor sells half of his business and brings in someone full of pee and vinegar they could easily double the business ‘ size. This means in 5 – 7 years when the senior advisor exits he gets half of twice as much. 

  1. Selling as a growth strategy

If an advisor sells half of his business and brings in the right partner the business could double in value. This means in 5 – 7 years when the senior advisor exits, he gets half of twice as much. The result is 50% of current value plus 50% of twice as much. This is a great growth strategy and win-win-win.

  1. Diversification

Most advisors largest asset is their business. Many do not maximize their retirement savings. They would not let their clients have 60 – 70% of their net worth in one asset. Yet their own portfolio is heavily weighted in one asset.

  1. Continuity Plan

What happens to your business in the case of your disability or death? An agreement for someone to buy or service your clients until your business is sold is a Continuity Plan. This contract protects the value of your business until you can return to work or if you cannot return to work.

If the senior advisor cannot work or does not want to work than they are protecting the value of their largest asset. Everything is in place. A buyer and a fair price is a win-win-win again.

An Exit Strategy is 90% an emotional decision. The industry has a problem in that advisors are not aware of their options. The distribution channel is doing NOTHING to change that. Buyers are doing a better job of educating senior advisors than any other source. 


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Succession Planning


By Jerry Butler


Fifteen years ago most people went into insurance and/or investment sales to make a good living and sell a product in which they were interested and believed could help their friends and clients. Building value in their business and selling it was not a consideration. Today most people in the financial product business have an asset that is probably 50% plus of their net worth.

In true “the shoemaker’s children were barefoot” fashion most of us (> 90%) have not done the proper planning to determine, protect, maximize and realize that value.


A distressed sale is going to derive the least selling price of any other situation. We all know that. What planning do you have in place to protect the value of your business in the short and long term in the event of an unforeseen event? Uncertainty by your clients; due to your disability or death will result in clients finding an alternative – in a hurry.  In addition, without the prospect of a proper transition – the value of your business is going to be worth a lot less than when there is proper planning in
place. If there is no formal valuation or continuation plan in place; your family may take the first offer that comes in the door.


It is ironical that financial planners talk to people all day long about retirement planning but do not have a solid plan for an exit strategy for themselves. If you want to retire in 5 years and know what your business is worth today and have  a plan to double the value in 5 years – wouldn’t that be more productive than just thinking “ gee I would like to retire in 5 years – hmmm. I will deal with that in 4 ½ years!


This is very important – it can save tens of thousands in income tax and professional bills in the future or in the case of an unforeseen event. The best corporate structure, clean balance sheet, legal contingencies addressed, wills and personal assets, etc. should be addressed sooner rather than later.


Most small businesses’ success is the result of one person. The problem is when the value is wrapped around the owner’s presence. If the owner is not there to select, negotiate and train a successor much of the value can be lost. It is important to have a succession plan in place to minimize the lost value and /or income from the business in the case of an unforeseen event. Even short term disability can result in a loss of income and/or value.


What is that saying about planning?  – “the best time to do planning was in the past; the second best time is now!”


It is a very important segment of Succession Planning to have many “what if’s” Exit Strategies. There are two basic scenarios to exit your business –

  • When you have planned to i.e. the perfect scenario – right time and right price; and
  • Every other time! This could be from death, disability, family issues, financial, etc. The main reason to have a Succession Plan is to protect your assets when you or your family HAVE to sell.

Succession Planning is similar to buying insurance – you do it for the unexpected events in your world not for the perfect scenario.



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Succession in Place by 60


By Jerry Butler



I know this is going to piss off many. In my defense, I am in my late 60s also and still going strong (and not going anywhere) but that fact does not change my thesis.

Succession and exit planning are common topics these days. Many advisors in their late 60s, 70s and older are hanging in there. Many have adjusted their business model to a lifestyle business. Great cash flow and little overhead and things are easy now. YES – you’ve earned it. You worked your ass off for the first 10 – 20 years. You should be able to put your feet up and cash cheques. But ……….

I think formalizing your business in your late 50s – early 60s is better for you, for your clients and for the industry.

Do What You Love Doing

Most advisors love the role they play in their client’s lives. Most advisors hate paper work and compliance. There are many solutions to keep doing what you love and stop doing what you hate. Sell and Stay / Merge / Junior Associate / Partnership are a few. Monetize all or part of your business and keep working with your clients. Those opportunities are out there. Money in your pocket, good cash flow and an exit strategy when you are ready to move on. In fact, sometimes you can get all of those benefits by adjusting your business model.

Clients Want to Know

Clients are asking “what happens to me if something happens to you?” Formal succession planning and/or a definite exit strategy will become compulsory in the not too distant future. It already being legislated in some US states. Dealers, MGAs, Provincial Securities Commissions and manufacturers will soon demand you have something in place. They will use the argument clients want to know but just like the financial markets risk is in the unknown. Something happens to you without proper planning and mistakes are made and clients leave …. In a hurry usually. Your business is now not worth as much. Remember serious disability is a greater financial hardship than death.


The average advisor is in their 60s. Fewer advisors are entering the industry. Though it is not your fault changes are being made which make it harder to get started – we do owe the industry some pay it forward. Think about your business – you are not increasing the number of clients, your client’s kids have gone elsewhere, your business is becoming worth less as your clients age and start taking more money out than they are saving PLUS technology changes and paperwork are weighing you down.

Solution: Do what you love and sell what you hate!!

Counter Argument

I hear it frequently “why sell my business for 3 x when I hang around for 3 years and still own business?” Obviously, a rhetorical statement. This is a common reply but it is clear most advisors are not taking home all their revenue. They have expenses, support staff etc. so three times is actually 4 or 5 years of income. PLUS as pointed out above; a succession plan does not have to mean riding off into the sunset. True your business does not sell for the same multiples as Microsoft but count yourself lucky – most small businesses have no buyers.


The bottom line is a properly designed formal succession plan and exit strategy is a win win win for you, your clients and your family.



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Sell and Stay Strategy


By Jerry Butler


The financial advice industry is in a seller’s market. There is consolidation of AUM as everyone is chasing the elusive and wonderful recurring revenue. It is a great time to take advantage of the marketplace for advisors with less than 10 year exit strategy. Lock in great multiples. Continue to earn money including up side on growth. Tax advantages that may be reduced or eliminated in the future.

Sell and stay is a great strategy for those advisors that want to take care of implementing a Continuation Plan (more info?), Succession Plan (more info?) and/or an Exit Strategy (more info?).


One of the most difficult decisions for most advisors is pulling the trigger on the sale of their business. It is their baby. They built it from scratch. Plus – they love what they do. At the same time, they know they should get something in place to protect the value both for themselves, their estate and their clients.

The Sell and Stay is the perfect solution. It involves selling a portion or all of their business similar to a merger but a more defined exit strategy. It allows the “seller” to lock in a great deal, keep working with clients, concentrate on what they like to do and earn an income until ready to exit.


Having a business in our industry can not be beat. Recurring revenue, huge up side, personal satisfaction and the opportunity to reward your motivation. Most advisors earn above average income and have an excellent lifestyle. That’s the good news! The bad news is the exit price is not a windfall and is usually 3 to 4 times the owner’s discretionary earnings (normalized cash flow before owner compensation). It is a common reason not to sell – “I make almost that amount in a couple of years!”.

There are many other reasons to sell including lifestyle, locking in the value and doing the best job possible for your clients. Working less. Paperwork less. Compliance worries less. You get the picture. If any of that sounds appealing – a Sell and Stay strategy may be right for you.


  • Move to a Lifestyle business: the advisor can adjust their work week / month to enjoy life away from the office while locking in a great price and receiving an income.
  • Monetize your business: put some money in your pocket and lock in a great multiple.
  • De-risk i.e. Valuations / Price: the multiple is fixed but you decide on the Exit.
  • Continuation Plan
  • Succession Plan
  • Exit Strategy
  • Keep doing what you enjoy
  • Future Growth


  • More opportunities
  • Less cash outlay
  • Economies of scale / synergy
  • Better business model
  • Client continuity and retention
  • Turn key operation / office
  • Talent acquisition / training
  • Acquire Knowledge – Knowledge


There are many challenges to finding the right match. In fact, my experience is it is much easier to sell a business than to match up advisors who will continue to work together into the future.

  • Find a match
  • Several steps – value, negotiate terms of the deal, employment relationship, partnership / shareholder’s agreements, conflict resolution/ etc
  • Sophisticated transaction structure
  • Most lucrative opportunity for buyers and sellers



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Realizing the Maxium Price


By Jerry Butler


Everything done to date to plan and develop the Succession Plan is to maximize the value
whether it is an Open Market sale or the result of an unforeseen event or a quick sale.


An Open Market sale is designed to maximize the price obtained in a sale under no duress between well informed rational bidders. 


Merging is an excellent way to create Quantum of Economic Benefit. Economies of scale, strategic advantage and financial synergies are available for larger practices. I think mergers will become common place especially smaller practices with younger advisors merging with older and larger
practices. These transactions will also form a basis for a successor.


Feedback loops are the most successful learning process known. Basically they follow the following process:

  1. Identify and quantify the areas to improve.
  2. Set achievable goals in those areas.
  3. Measure the progress and compare actual to budget.
  4. Go back to #1.

I recommend that once you have a comprehensive valuation that identifies the areas that can be improved (Maximizing Value Section) setting the goals and actually reviewing on a minimum of monthly basis will develop productive habits that will continue to increase the value of your business and achieve your goals.


Queenston Consulting works with their clients in many financial situations.






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Succession Planning


By Jerry Butler

> Formal look at the business
> Overview of transition risk
> Is business positioned for growth, maintain or declining revenues
> Overview of what is happening in the Industry and similar financial advice businesses


⮚ “As nouns, the difference between valuation and evaluation is that valuation is an estimation of an object’s worth, while an evaluation is an assessment, such as an annual personnel performance review used as the basis for a salary increase or bonus, or a summary of a particular situation.”
⮚ Evaluation allows for “bookmarking” comparing financials to similar businesses to identify if revenue and expenses are in line.
⮚ An evaluation is going to look at a business in relation to strengths and weaknesses
⮚ The business’ structure and the business model is an important consideration when designing a succession plan
⮚ An evaluation is going to identify those value drivers that need improvement in order to adjust the business to be ready for a transition
⮚ The evaluation process is designed to create an action plan to prepare the business for a merger, a sale and/or an exit strategy

⮚ Time frame
⮚ Define Owner’s Lifestyle plan
⮚ Plan should be specific but flexible
⮚ Does the business need to be adjusted – corporate, partnership, associates, etc.
⮚ Define the Transition Strategy – minimize transition risk with clients / employees / etc.
⮚ Define the Financial Terms expected
⮚ Define the transfer ownership – in specific tranches, flexible over time or 100%
⮚ Exit Strategy


⮚ Based on the above – Strategies are defined
⮚ Tactical Plan is designed to accomplish the strategies
⮚ Monitor and Adjust program

> Continuation Plan
> Buy /Sell – Shareholder’s Agreement – Etc.


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Monitize Your Business


By Jerry Butler

There are several ways to use your business’s value to put $$$$$ in your pocket  – often without reducing the value of your business or even increase the value.

Sell Your Least Productive Assets – If you have too many clients or too many products or specific assets that are not your speciality you may want to consider selling those assets – to a non competing entity or bringing on an Associate to effectively mine or buy those asset / deal with those clients. If you have purchased businesses in the past you may have a lot of customers who have not become clients. Queenston can help you. We have qualified and interested buyers all over the country.

Dealer to Dealer Transitionchanging Dealers can accomplish a few things usually – put $$$ in your pocket; firm your business up and adopt some better systems and/or other synergies. Queenston has working relationships with several Dealers and we are familiar with most so can give you the scuttlebutt we hear out there.

Sell and Stayif you are considering an Exit down the road you may want to consider selling now and staying on to run the business or continue to deal with your favourite clients. Right now, markets are high and interest rates are low – great time sell but not Exit!!

Leverage your Businesswith low interest rates and available financing now is a great time to borrow against your business to pay off personal debt (make your debt tax deductible) or diversify your investments. A cottage perhaps or a southern destination becomes attainable. Queenston works with a few lenders and may be able to point you in the right direction.

Change your Business ModelOne of the most important factors to determine the value of your business is your business model. Is it what buyers want? Are your terms for a transition flexible? Is it easy to move to a new advisor? What are the demographics of your clients? How strong is your brand? The below to average business may sell for 1.5 – 2.5x recurring revenue. Above average businesses can sell in the 3 – 4x recurring revenue.



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By Jerry Butler

 My Dealer, MGA, Etc. will tell me the value / price of my business or another business.

Unfortunately this is not true. If your Distributor has some sort of put option on your business– it is way below market value. Plus your Dealer can cancel your license sponsorship at their discretion – even if you do not lose your license – at any time. Queenston has been involved in law suits where the license is cancelled and the clients distributed to other advisors. The advisor is left out in the cold. Your distributor is going to do what is best for their business model just as you should be doing what is best for your business model. You built your business and you have to know the value and have a formal plan to protect that value.



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Determining the Value of Your Financial Services Practice

The best opportunity Queenston has marketed?

By Jerry Butler 

As an independent advisor, your business is now one of your largest personal assets. Understanding what your business is worth, and what drives that value, are essential factors in making effective, efficient business decisions.



Using the industry’s largest comparable sales database of financial service businesses, Queenston Consulting is able to deliver a detailed and realistic valuation analysis. The CALCULATIVE VALUATION provides a clear picture of value within the context of actual deal terms.



Valuing your business is an important step to managing equity. While some advisors obtain a valuation to determine their selling price, the Calculative Valuation is used for many other purposes:


• Benchmarking and increasing value years before a sale

• Buy/Sell Agreements (Death/Disability Agreements)

• To facilitate succession planning discussions

• To plan and implement internal stock sales

• Acquiring practices




Over the last decade, the Queenston Consulting valuation services have evolved from annually published, and often quoted, multiples of revenue, to a much more


accurate and complete valuation system. Queenston Consulting’ valuation analysis provides owners a neutral, accurate, fact-based opinion of value, based on the industry’s largest marketplace for independent advisors. By using comparable sales data, and measuring your business’s equity on  the three major valuation indexes of Cash Flow Quality, Transition Risk, Growth and Marketplace Demand, Queenston Consulting can determine the fair market value of your business.









Regardless of the size of your practice or your career path, determining and monitoring the value of your practice is the single most important step to planning for the future of your advisory career. Do it right. Understanding what drives the value of a financial services practice impacts every decision you’ll make in the years to come, from acquisition, to hiring, to succession planning.




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9 Easy Ways to Increase the Value of Your Business


By Jerry Butler 

#1. Do you have a Continuation Plan to protect income and/or value?

90% of advisors do not have a “plan” in place for their business to continue if the advisor is not available for a week, a month or longer or perhaps even forever. 10% of all businesses are transitioned because they HAVE to be. Disability, death or loss of license can create a situation that is not “fair” to the advisor or their family and especially for their clients. 

If your business has to be transitioned it is worth 50% to 100% less than its fair market value. Do you and your family a favour – get a proper and legal Continuation Plan in place.

#2. Do you have a value added proposition?

Why do your clients deal with you? Clients can “buy” financial products on almost every corner so they need to know the value you bring to the table vs. the competition. This is very important as a value added proposition is a transferable identifiable intangible.

#3. Who is your client’s “financial advisor”?

If asked “who is your financial advisor?” how would your clients answer? Most advisors would be shocked to know that their client’s may answer something other than them. Many clients will answer the name of the dealer or even the manufacturer of their holdings. This is especially true of the bank owned firms as banks have done an amazing job (and a 100+ years) of branding. This is why you are “required” to answer the phone with the name of your Dealer. You are branding your dealer.  

#4. Your licensed assistant.

Do your clients know your assistant? When you are not there do they ask your assistant what they need? A good long term assistant, expecially if licensed, will reduce the transition risk of selling your business. Many advisors look at their assistant as a necessary expense. Make your assistant an asset!

#5. Customer Service Process.

Do you have a clearly defined process that is clear to your “team” and your clients? This work flow management tool is one of the most underused and underappreciated arrow in the advisors quill. A clearly defined process allows most of the “work” to be done without the advisors step by step input. The more work done without the advisor – the more the business is worth.

#6. An Inside Sales Process.

I am always amazed that advisors “prize” a licensed assistant but they do not train them to “sell” or even qualify a client for a potential sale. This is another area that can have a clearly defined work flow so that the questions needed to be asked are asked by the assistant not just the advisor. An inside sales process is an incredible asset as it allows the business to make money without the advisor. In addition, this allows the team to service and sell to a much larger client base. 

#7. A Client Relationship Management (CRM) data base.

An up to date and complete data base for clients and prospects can greatly reduce transition risk and therefore increase value. If someone other than you (including staff) sits down with a client and they are able to summarize recent activity and confirm risk tolerance it goes a long way to help the client feel comfortable.

#8. Effective use of technology.

The effective use of technology is an oxymoron to most advisors! They may have the best and the newest but it is not integrated into their business so that the business is more effective and more efficient. Technology is the perfect tool to allow staff to do more of the chores of the advisor. This frees the advisor to spend more time with clients and prospects. Your web site, financial planning, portfolio management, social media marketing, client portals, the cloud, the paperless office, a workflow management system, integration, client communication, presentations – the list goes on. The effective and efficient use of technology will not only increase the value of your business it will keep you in pace with your competition.

#9. What is your Brand?

Branding is one of the most overused and misunderstood concepts ever. What do your clients, prospects, staff, friends all think of you and your business? That is your Brand. If your email address is bubba@hotmail than that will influence your brand. If you answer the phone “YUP” (as I have heard a few times) that will influence your brand. Website, marketing, promotions, etc will all influence your brand. Your brand, if done properly, will outlive you! That makes your business more valuable. Everything your business does will influence your Brand so take it all seriously.


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