Business owners know that they ought to be planning for their inevitable business exits. Many of them talk to their spouses about it and may even do sporadic Exit Planning research. But since 2014, BEI business owner surveys have shown that most business owners don’t talk to their existing advisors about their business exits very often. In fact, in BEI’s most recent survey, only 24% of owners had talked about creating an Exit Plan with their existing advisors.
Successful business exits hinge heavily on trust and often run the gamut of emotion for business owners. Owners want assurance that they can exit their businesses on their terms: financially, strategically, and emotionally. Advisors are responsible for putting their clients in that comfort zone while still providing both their core services and Exit Planning services. How can they do that successfully?
The answer lies within the Advisor Team. Successful Exit Planning Advisors know that they cannot plan a business owner’s exit by themselves. An Advisor Team centralizes expertise and gives owners the assurance that they can exit on their terms, because each advisor has a piece of Exit Planning expertise required to shape an Exit Plan. But where do these Exit Planning experts come from? Today, we’ll look at how Exit Planning Advisors vet their Advisor Team members to assure owners that everyone is capable.
How Can Owners Know the Team Is Capable?
When business owners truly test the Exit Planning waters, they’ll talk to an existing advisor, such as their CPA, financial advisor, or attorney. Commonly, those advisors don’t have the expertise necessary to confidently talk about Exit Planning. This is where an Exit Planning Advisor really comes in handy. Exit Planning Advisors know how to find well-experienced team players who are both timely and fee-sensitive.
Sometimes, when owners see the makeup of an Advisor Team—which usually includes the Exit Planner, a CPA, a financial advisor, and attorney, and others—three thoughts pop into their heads: “How much will this cost?” “Are all these advisors necessary?” and “How do I know these advisors are capable?” Let’s try to answer that third question by looking at some ways Exit Planning Advisors vet their Advisor Team members.
According to UMB financial planner Dan Weeks, one of the most successful vetting strategies Exit Planning Advisors use is creating an advisor roundtable. Roundtables allow Exit Planning Advisors to bring groups of experts in other subjects together to discuss Exit Planning. For example, a financial planner who is also an Exit Planning Advisor might hold a roundtable of local advisors to introduce Exit Planning to them. This provides them the opportunity to select the best professionals who have the interest and capability to contribute to Exit Planning.
Properly conducted roundtables allow Exit Planning Advisors to emphasize the owner-centricity of Exit Planning and hammer home the core principle of Exit Planning: Advisors work for the owner’s interest and no one else’s. They put Exit Planning Advisors in front of growth-oriented outside professionals who want to serve.
Because Exit Planning requires teamwork among different professionals, Exit Planning Advisors necessarily work with many different kinds of advisors. The diversity of professions within the Exit Planning Advisor’s network gives the Exit Planning Advisor the opportunity to cast a wider net of capable advisors. For example, an Exit Planning Advisor who’s worked with a CPA for 20 years and knows that CPA is highly capable from experience has access not only to that CPA but also that CPA’s network. If the Exit Planning Advisor has a client whose Exit Planning situation is outside of the CPA’s scope, the CPA may be able to call on someone in their own network to assist. This daisy-chain effect tends to breed success for the Advisor Team and the business owner.
What Do Exit Planning Advisors Look For?
In vetting advisors for the team, Exit Planning Advisors look for four traits:
- Well Experienced: The multifaceted nature of Exit Planning requires high-level expertise from advisors. Exit Planning Advisors look for the most knowledgeable advisors in their respective fields to facilitate an easier navigation through the Exit Planning Process. Exit Planning Advisors often ask advisors whom they personally trust which advisors they consider to be the best in a field other than their own.
- Team Player: Exit Planning is an intricate web of different professions centered on one goal: allowing the business owner to exit on their terms. Exit Planning Advisors look specifically for creative and collaborative advisors willing to move as a unit toward that one goal. They accept only advisors who understand that the business owner’s wants and needs rule all decisions and recommendations.
- Timely: Many successful Exit Plans take 5–10 years to fully implement. While this may seem like a decent amount of time, it isn’t. Exit Planning is both long term and swift, and its intricacies require advisors to stay on task toward the business owner’s successful exit. Exit Planning Advisors look for advisors who can deliver recommendations quickly and efficiently.
- Fee-Sensitive: Exit Planning Advisors work with advisors who are both expert and timely. This means that those advisors are the best of the best and efficient. This lets business owners rest assured that the fees they pay will reflect the efficient work that those advisors do.
Trust is crucial in Exit Planning. Exit Planning Advisors earn the trust of owners and other advisors by training to be the best of the best, which helps them identify other capable advisors. Owners want to know that the advisors they work with are capable, especially when they learn that they’ll likely be working with a team of advisors, some of whom they know nothing about. Exit Planning Advisors have the tools and networks to properly vet advisors. They also have ways to assure owners that they can shape and implement their Exit Plans in their terms.
Exit Planning experts come from capable sources, including right here at BEI. Advisors who can convey their capability do themselves and their business-owning clients a true service. Perhaps best of all for business owners, Exit Planning Advisors do most of the searching and heavy lifting, taking a chunk of stress off the owner’s shoulders at the outset.
- Exit Planning Advisors often take the lead in finding capable advisors for the Advisor Team. This may include a business owner’s current advisors or advisors within the Exit Planning Advisor’s network.
- Roundtables and strong individual networks are two places Exit Planning Advisors usually look for capable advisors.
- Advisor Team members must be well-experienced team players who are timely and fee-sensitive to join an Exit Planning Advisor Team.