Succession and Exit Planning: What 40% of Advisors Must Face in the Next 7 Years with Nick Arellano

What's the difference between a smart succession and a rushed exit? Tyson Ray and Kim Cochenour are joined by Nick Arellano to discuss why treating your firm like a house sale is risky, and how valuation, growth, and planning shape your future. This conversation will help you approach succession and exit planning – something 40% of advisors will face over the next 5-7 years – with clarity, confidence, and long-term vision. Tyson Ray, Kim Cochenour and guest Nick Arellano look at the elements of a smart succession and what makes for a successful business exit. Nick shares his background, while Kim shares an advisors-plumbers similarity. Not having a succession plan, and the increasing age of advisors are something advisors should really be paying attention to as the landscape is shifting. This may come as a surprise to you but an estimated 40% of advisors are set to retire over the next 5-7 years. Many advisors treat succession just like selling a house – Nick explains why that happens and the potential risks of having that approach. Tyson shares the story of how getting a valuation impacted him, and what advisors in a similar position should consider. Nick goes over the key factors of valuation: growth, value, and profit. Kim stresses a misconception many advisors believe, as they think that's valuation is only based on their revenue… Understanding that your business is not just producing income, but is an actual asset that has value is a mindset shift many advisors are unable to wrap their head around. Nick explains that whatever you take on an annual basis is going to impact the value you're going to get. The less you take upfront, the larger the value is going to be. The more you take in compensation, the lower the value is going to be. Want to do a successful succession? "You kind of need to start checking your ego, and now you just start letting go of some things to enhance the value of your company," says Tyson. Nick goes over why, in his opinion, the financial advising industry hasn't incorporated young talent really well. Many advisors have an operational agreement, but don't actually know what's in it. Remember: everything in valuation comes down to growth, risk, and profit. Nick discusses what their goals working with advisors is, and how you can start the process of getting help from Your Legacy Partners. Don't forget: it's not really about the exit…it's about what comes next. Mentioned in This Episode: TotalSuccession.com TotalSuccession.com/podcast FORM Wealth Advisors Tyson Ray Kim Cochenour Nick Arellano YourLegacyPartners.com [email protected] The ALS Foundation