There is a New Quarterback on the Team: Why Financial Advisors Are Now The Most Trusted Advisors for Business Owners

The traditional ‘quarterback’ for a business owner planning their eventual exit of their business was traditionally the CPA.? No longer.

The 2023 National State of Owner Readiness Report, published by the Exit Planning Institute, shows a substantial shift in who business owners consider to be their most trusted advisor.? In 2013 it was the CPA, in 2023 it was the Financial Advisor.

You should buy a copy for yourself here:? 2023 Owner Readiness Report

There are two essential questions for a business owner to consider when evaluating this shift:

1. Why?
2. What does it mean for me?

Why?

There are several factors, detailed in the report, to include shifting demographics of selling owners from Boomers to Gen X and the investment (haha) of the financial services industry in sharing content and positioning themselves as the quarterback.

I would add one more to the mix:

No other professional in the growth and exit planning process of a company is more accountable to the overall success of the owner’s exit than the financial advisor.

Think about it…

Everyone else in the exit planning process ends their involvement, financially, upon the successful exit.? The financial advisor, however, is now accountable for the execution of their financial planning and advice for that owner from that point forward.? If that plan was formulated incorrectly, the best case scenario is being fired.

Additionally, this is where the Personal Plan as described by Chris Snider in his tremendous resource for business owners “Walking To Destiny” comes into focus and introduces additional accountability to the financial advisor.? How well the team (and especially the financial advisor) prepares that business owner for enjoying life post-exit is going to determine whether or not that advisor gets to keep managing the investments for that owner.

Everything changed (for the better) for me in April of 2023 when I was sitting in the opening ‘fireside chat’ of the Exit Planning Institutes Summit 50 experience in Phoenix.? Chris Snider had just published the 2nd edition of his book and 50 of us were getting a sneak peek into it before the rest of the Summit attendees the next day.? Chris was asked, somewhat snarkily, ‘what is different’ and his response was stunning and powerful:? It’s all about the Personal Plan.

Gen X is much more quality of life focused than the Boomers and they are gravitating more towards financial planning as a whole and value the process on the personal side even more.? Successful financial advisors (having both a CEPA and a CFP) are positioned to not only be in that #1 slot of trust, but deliver spectacular results.

Your financial planning process, with business owners, needs to include both the financial planning data AND the personal plan for the owner that will be something they enjoy and bring meaning to them as they transition from being an owner to being a retiree.

My best piece of advice for both financial advisors and business owners when it comes to the Personal Plan?

Do it now.? When I work with business owners of financial services firms as what we call a Value Advisor (preparing them for growth and profit now and better options and multiples at exit)...I have them get a financial plan done (you would be shocked at how many financial advisors don’t have one…if your current one admits they don’t have one, fire them because they don’t believe what they are selling you).

After the financial plan is done, with a detailed Personal Plan for the owner after exit, I have them execute it in some way right now.? For example, maybe the owner wants to fly fish all the time after they retire.? Well, a couple of things need to happen before then:

1. The owner needs to be physically fit enough to be able to do so after exit.? Enter the personal trainer and nutritional coach to make sure we have the ability then.
2. The owner needs to be proficient enough to truly enjoy that level of activity.? Enter the fishing guide and casting instructors to make sure that the skill and proficiency is in place before exit.
3. The owner needs to fish a lot in a window of time to figure out if they really like it that much.? I recommend a 30 day sabbatical to all my clients as a waypost on the way to exit to practice (a) doing whatever they are planning on in their Personal Plan and (b) practice not answering the phone or email from work for 30 days straight.

There is so much more to it, but if you get the Report (see above) and hire the right financial advisor and value advisor, you as the business owner are in a much better place than before and have a real shot of a tremendous ‘second act’.

Questions, comments and/or haterade?? Feel free to do so below and if you feel so inclined like, share and repost.? I am always glad to hear from you all and am here to help.

All the best and tight lines, Mike