Advisor Succession Challenges - Issues To Negotiate And When To Walk Away

Michael Kitces | Nerd's Eye View, June 2015

Summary: While buying into an advisory firm can be an incredible opportunity in the long run, there are also some very important caveats and potential problems to consider, in terms of both the financial terms of the succession deal, and also the more nuanced challenges of participating as one of several partners in a multi-owner firm.

Sometimes, the potential problems and caveats of a purchase are just too great to bear, and it’s necessary to walk away from the deal. Whether it’s an ‘unreasonable’ valuation of the business given its real cash flows, disagreements about how to run the business, or simply that you’re not comfortable with a marriage-like long-term relationship with the potential partners, in some cases there’s just no viable resolution."