There’s a common misperception in the advisor community that an expertise in Exit Planning is a time-consuming addition to one’s core practice. Advisors think they don’t have time to devote to an additional practice area.
We'll concede that, like all worthwhile endeavors, it takes some time to get up to speed in Exit Planning. BEI helps shorten that time through a two-day Boot Camp and by offering a Certified Exit Planner (CExP) designation through online courses and guided plan preparation. But what about after that? Is Exit Planning too time consuming for advisors?
Our Advisors consistently tell us that their expertise in Exit Planning takes more time in all the right ways.
How Exit Planning Benefits Your Practice
First, an Exit Planning expertise attracts more referrals, both from clients and other advisors, to their core practice areas. Exit Planning Advisors end up doing more work in their core practice areas in addition to the work they would not have had access to without Exit Planning.
To implement the Exit Plans they create, advisors use the tools, services, and products from their core practices. The Exit Planning Process uncovers the need for the work that would have likely never been done absent an Exit Plan.
Which roles do the attorney, CPA, financial advisor, and insurance advisor play in the creation of a successful Exit Plan for a business-owner client?
1. Generates More Revenue
We turned to two of our Members to provide details about the time commitment and return on their investment in their Exit Planning expertise.
Allan VanderHamm—a CPA, valuation analyst, and Certified Exit Planner from Bellevue, Washington—says this about his core practice: “As a result of Exit Planning services, we have completed more complex tax and valuation work than without EP services, while strengthening and broadening our client relationships. Clients pay for these services because they see the benefits.”
Dave Zimmerman, CExP, CLU, ChFC—a financial professional from Louisville, Kentucky—agrees. “I can’t imagine a better venue than Exit Planning to implement meaningful insurance and investment solutions.”
We asked both Advisors whether the core work they now do, which is generated from Exit Planning engagements, is more profitable than the work generated from non-Exit Planning engagements. Zimmerman says, “Yes. The all-encompassing Exit Planning platform makes it much easier to talk about a diversified set of solutions. The ancillary product solutions make the work far more lucrative for the advisor practice.”
As a CPA who bills on an hourly basis, VanderHamm notes that he measures profitability a little differently. “I don’t think I’ve ever had a write-off or a complaint about fees for Exit Planning-related services. From that perspective, Exit Planning work is more profitable.”
2. Builds Awareness of Exit Planning
Advisors tell us that with Exit Planning as part of their skill sets, they invest more time explaining what Exit Planning is to clients, referral sources, and even to peers in their firms. “As I’ve become better known as an Exit Planner,” explains VanderHamm, “other advisors who receive my newsletter or have common clients will call me to learn more about Exit Planning and to ask if it suits one or more of their clients.”
Zimmerman notes that it did take time for him to secure the buy-in of his strategic alliance partners on Exit Planning, “But Exit Planning is an incredibly important aspect of our practice. My partners realize that Exit Planning provides a great platform to meet new advisors and to deepen their relationships with clients.”
3. Differentiates You From Your Competition
Exit Planning distinguishes advisors from the noise in their markets. VanderHamm explains that, “Exit Planning sets me and our firm apart from the CPA pack and opens conversations with prospective clients not only for Exit Planning, but for other specialties in our accounting firm as well.”
4. Brings Fulfillment
If you are already as busy as you want to be and assume that creating a new practice area—Exit Planning—will just add to your workload, in one sense, you are correct. It will. But the work it adds is more challenging and rewarding, both financially and professionally, for you and your client.
VanderHamm and Zimmerman delegate much of the non-Exit Planning work they generate from Exit Planning to other professionals in their firms because they prefer the more interesting and financially and personally rewarding Exit Planning work. In Zimmerman’s case, he has trained an associate to perform some of the behind-the-scenes work of coordinating the activities of a client’s other advisors. “This gives me more time to develop relationships with my clients, prospects, and other professional advisors.”
Of course, if you have capacity for more core work, you won’t need to refer work to others until reach your capacity.
About The Advisor Members
VanderHamm leads the Exit Planning practice at Berntson Porter & Company, an 85-person CPA tax, accounting and consulting firm. He has used Exit Planning to both expand his core practice and to add tools to his M&A and valuation consulting toolbox. “Depending on the month, Exit Planning now constitutes between thirty and sixty percent of my practice. It puts me in the position to refer tax and accounting work to my partners, but also to work in a meaningful way with other outside professional advisors.” VanderHamm has created a core team of outside advisors to give presentations to owners in the Seattle area.
Dave Zimmerman is a partner in the Louisville office of ARGI Financial Group and oversees its Risk Management Division. He says that, “Exit Planning has become a key part of the firm’s overall business and wealth planning solutions practice.” When asked if his Exit Planning expertise has changed his relationship with his clients, he answers, “Absolutely! As an Exit Planner you become an owner’s trusted advisor. No longer is your relationship transaction based. Instead, you become part of an owner’s life.”
The bottom line is that Exit Planning:
- Attracts more inside and outside referrals to your core practice.
- Gives you an opportunity to connect with owners, referrals, and peers within your firm in a meaningful way.
- Distinguishes you from similar professionals in your market.
- Creates more interesting and rewarding work.