Financing Independence: A Lender’s Perspective on Breakaway Transitions, M&A and Succession

A conversation with James Hughes Head of Investment Advisory Lending Live Oak Bank Overview James Hughes of Live Oak Bank discusses debt financing for prospective breakaway advisors looking to de-risk a leap to independence or payoff a note balance, or business owners seeking funds for acquisitions or succession planning.   Listen in… > Download a transcript of this episode… NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.   About this episode… Whether you’re a prospective breakaway advisor looking for liquidity to de-risk a leap to independence or payoff a note balance, or a business owner seeking funds for acquisitions or succession planning, you have an important decision to make around accessing capital. Because as the wealth management industry landscape evolved, advisors became the beneficiaries of several paths to consider. Over the course of this series, we discussed “selling” a portion of the business (that is, equity) to any one of the many minority investors or private equity firms in the space, as well as independent broker dealers and supported versions of independence that offer forgivable loans to help fund a transition. But what about direct financing options? James Hughes, the SVP and Head of Investment Advisory Lending at Live Oak Bank, joins the show to discuss taking on debt to fund your business’s next phase of success. As the #1 SBA (Small Business Association) lender in the country, the bank started lending to advisory practices back when James joined in 2013—at a time when there were few other options available in the space. In this episode, James speaks with Louis Diamond about the many reasons advisors opt to work with a bank, including: Taking on debt vs. selling equity—and what factors a current or prospective business needs to consider when selecting their financing path. The unique position that Live Oak holds in the industry—and why large institutions and local banks are less inclined to finance an independent wealth management practice. Understanding the differences between different use cases—and what you need to know about accessing capital for succession, acquisition, growth, or financing a leap to independence. Succession planning—and how Live Oak offers an alternative to business owners and next gens alike. Access to capital for breakaways—and how an advisor might benefit by funding a transition with debt vs. equity. And much more. Taking on debt vs. selling equity is a business decision not to be taken lightly, making this episode an important one for both prospective and current business owners alike.   Related Resources The Path to Independence: 6 Key Elements to Consider Before Starting Your Journey With so many options to choose from, how does an advisor decide which path to independence to take? Read-> Investing in Independence: How Investors in Wealth Management Firms are Helping Wirehouse Advisors Make the Leap There was once a time when investors were only interested in those already independent. But wirehouse advisors are finding these same capital sources may have an interest in funding their move. Read->  Industry Update on M&A: Meet the Investors—Why It’s Important for All Advisors to Know Who They Are Whether you’re a wirehouse advisor or already independent, the inevitable challenges you will face at some point in your career are the same: Accelerating growth, creating scale and monetizing your life’s work. Listen->   James Hughes Head of Investment Advisory Lending James Hughes serves as the Head of Investment Advisory Lending at Live Oak Bank. In his role, James leads the sales team and oversees the lending process from the initial call to servicing of the loan. Since joining Live Oak Bank in 2013, he has helped hundreds of businesses achieve their goals through financing. James has served in several roles at Live Oak, including as a Sales Trader, Relationship Manager, Underwriter and Loan Officer. Prior to joining the bank, James worked at one of the leading investment banks in the world. There he managed a group of derivative trading assistants and several client service teams. Through this unique experience James has gained an understanding of the challenges that business owners face. James is dedicated to assisting small business owners in the Investment Advisory industry attain success and continue to thrive with Live Oak Bank’s products and services. James has a Bachelor of Arts in Economics from Bucknell University.   Also available on your favorite podcast app and other media sites.