Throughout our past blogs, there is a consistent and recurring theme when we talk about succession planning—time—which is where our own succession story begins. Pinnacle Advisory Group’s three founding partners began planning for the firm’s succession and their own exit about ten years ago.
The initial driver for starting the process of succession planning was their desire to accomplish two goals: spend more time engaging in activities that they enjoyed and to continue to provide fiduciary and holistic advice for Pinnacle’s clients.
To start, they thought that broadening the management team would help secure a better transition of responsibilities. Eventually, the time came when they were truly ready to retire, and they began their search for the right buyer who they felt would best serve their clients. As a result of the time they spent transitioning their responsibilities, they were able to be laser focused on finding a firm with the suitable complement of capabilities and culture, so that the day to day operation of Pinnacle and the care of its clients would not interrupted or neglected.
In the end, Pinnacle Advisory Group was acquired by Congress Wealth Management, LLC, a Boston, Massachusetts based investment management firm with a similar, client centric philosophy as Pinnacle. Paul Lonergan, President of Congress Wealth Management, describes the acquisition as a “merger of equals.” Both firms share a similar focus on client care and their fiduciary responsibility. Both firms have core competencies that work together in complement. And together, the new combined firm will strive to serve Pinnacle’s clients better than before.
If you have been thinking about your next chapter, parts of this story may resonate with you. We have heard from an increasing number of advisors over the past year who are ready to retire now. Time (there it is again) is one of the most important elements in a succession plan. Our experience, both for our own firm as well as the firms we have helped at Pinnacle Advisor Solutions, has been that the best outcomes result from beginning planning at least 3 years in advance.
It takes time to decide what the right path for you will be – an internal succession or selling outright. It takes time to find the right successor – either to bring someone on board to train or to find the right buyer. It takes time to transition your clients to a new investment platform and to a new advisor. Even if you choose to sell, you may be required to stay on with the new firm after the transfer of ownership to help facilitate the transition of your client relationships. It takes time and a lot of it.
Pinnacle’s succession success came as the result of a multi-year exit strategy. While smaller firms need not follow the same course exactly, it all begins with a plan and every plan should include plenty of time to execute.