The ClientWise Blog

One of the biggest challenges for any thriving advisory firm is finding time (beyond day-to-day operations) to plan and execute on the activities which will most positively impact the business’ enterprise value.

We’re not talking about the “market cap plus debt, minority interest, and preferred shares, minus total cash and cash equivalents” financial definition of enterprise value. Instead, we’re talking about the ability of your business to not only survive but thrive without you. It’s a harsh but essential reality – the less dependent on you personally, the more valuable your business. So the question is, what actions can you undertake and what steps can you implement to help achieve that aim?

Read More

“Neither a borrower nor a lender be: For loan oft loses both itself and friend.”

Hamlet; Act 1, Scene 3

It’s one of the most recognizable and oft quoted lines in all of Shakespeare’s works, nestled right between two other pieces of sage advice that Polonius imparts to his son Laertes: “give every man thy ear, but few thy voice” and “this above all; to thine own self be true.” But while there’s a certain universal wisdom to those other two tenets, if you’re an advisor who’s seeking to rapidly and measurably grow your business, you’ll be well served to embrace rather than avoid the capital of others.

Read More

For any enterprise that’s serious about meaningful and sustainable growth, getting a grasp on how to better control these two critical financial metrics is essential. As you grow, you’re facing a cascade of important decisions:

• Should I add staff and when?
• Do I need to start thinking about more office space?
• When is it advisable to merge or acquire someone in another location?

While profitability can certainly be a useful financial metric, it’s your business’ capacity and productivity which are the two inextricably linked measurement tools that will give you the clearest insight into making those types of mission critical decisions.

Read More

How three unique firms found common purpose in coming together

Rick Kent (founder of the suburban Atlanta-based Merit Financial Group) was actively seeking to grow his business – both organically and acquisitively. The former approach was yielding tremendous success, while the latter was proving to be a far more difficult challenge.

There’s no question that mergers and acquisitions of advisory practices are complex and emotionally-charged undertakings. Keep in mind that the seller is considering relinquishing control not just of an asset, but essentially of their life’s work. In many instances, their practice is tantamount to an adjunct family member. It’s a stumbling block that Kent had become all too familiar with. “The seller wants a deal to come together, but psychologically there’s a deep seated fear that when they pull away from the business, everything’s going to crumble,” according to Kent. “It’s far less about the money and price of the deal, and far more about the psychological impact of selling the business. There needs to be an extraordinary amount of trust established for any deal to succeed.”

Read More

If you were actually able to stay awake through your 8:00am college economics class, you might recall a definition of Enterprise Value as a firm’s market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents. If you did recall that calculation, congratulations! Now forget it, as it has no relevance to this discussion.

In the world of financial advisory practices, true enterprise value has a different and far less quantifiable definition – the ability of your business to outlast its founder while continuing to sustain and grow. But how exactly does an adviser go from maintaining a practice to building a scalable, sustainable and durable business with enterprise value?

Read More

For the vast majority of financial advisors, building a business begins with anything but a strategic growth and onboarding plan. They start out as a jack-of-all-trades; perhaps with annual AUM goals and corresponding planned increases in head count, but allow the business to grow organically and haphazardly. As demand begins to consistently exceed capacity in a certain functional area, they bring on new people and skill sets (perhaps a new relationship management person, a portfolio manager, or an operations manager) to offload some of their responsibilities to.

Read More

 

Read More