posted on June 9th 2014 in Your Financial Advisor with 0 Comments /

Anyone who owns a home is familiar with the benefits of amassing as much equity as possible; you want to have a large gap between what you owe and what your home is worth when it’s time to sell—so you can pocket the proceeds.

The same concept is applicable when it comes to your business. The question, however, is this: when it comes time for you to put an exit strategy into action, will you have any business equity?

Unfortunately, for many sole proprietors, the answer is going to be no. Why? If your business is built based on you showing up to serve clients, the likelihood is that they’re going to scatter if you’re no longer there. No one wins in this scenario: your family is left with little or nothing and your clients are left in the lurch.

What’s the alternative? You can build value by becoming part of an ensemble firm. A number of things transpire when this takes place, including the fact that your business is worth more, you can focus on the things you’re good at, and your stress level is significantly reduced because you know your colleagues have your back.

Additionally, most former solo practitioners find they earn more and have more control as a member of a team. And, they’re no longer a prisoner to their practice; they can choose to spend time with family and even take vacations—knowing their clients are being taken care of in their absence.

How does this relate to equity? It’s significant. When you join a firm, there’s more to your practice than just you; it’s more valuable to both you and your family. Your clients are familiar with the brand you work under and have peace of mind from knowing their money won’t be in motion, so they’re not likely to flee to an advisor at another organization in your absence. That’s of great value.

Frankly, you have everything to gain by moving from a “lifestyle practice” to a stronger business model based on collaboration and teamwork—and much to lose if you don’t. From day one, you’ll add equity to your practice, gain stability, avail yourself of systems and processes to support your work, and provide your clients with the knowledge that things will be OK if you’re absent from the practice due to retirement or because you’re enjoying a week in Bermuda.


about the author: Anthony G. Ferreira CFP®

anothony640x640Anthony G. Ferreira CFP® specializes in wealth management for high net worth individuals and families with concentration in estate planning, tax efficient investment strategies, retirement planning, portfolio management, risk management, and benefits planning. Learn more and/or Contact Anthony

Continue Reading

Other articles filed under Your Financial Advisor

So, You Just Won the Lottery; Now What?

May 21, 2017 - Successfully managing a financial windfall We’ve all heard the stories, if not firsthand, at least in various news reports and anecdotes. Some “lucky” person picks the winning numbers; prances before the cameras in what can only be described as a media...
Continue Reading

Robo Advisors vs Financial Planners

April 26, 2017 - [embed][/embed] When is a robo advisor sufficient to manage your investments? Is an algorithm ever a good substitute for the personal touch of a human manager? WorthPointe Partner and Chief Investment Officer, Joshua WilsonCMT®, AIF® weighs in on when to...
Continue Reading

The Morgan Report 2017 Q1: Reliability – The Next Wave In Investing

April 13, 2017 - Everyone has a different perspective on people, values and philosophies they want to help guide them in life. As we grow and learn, we realize some associations or ideas we have had are unreliable; wisdom in part should be the...
Continue Reading

U.S. Stocks: Smart or Lucky?

March 5, 2017 - How is today like 1997? Take a look at the following graph. The top two lines are U.S. stocks, large and small. Over the past seven years, they have far and away outrun the light blue line, which shows international...
Continue Reading

Gold: Is It Worth Its Weight?

December 18, 2016 - Political upheaval, inflation pressure and uncertainty of global norms have recently resulted in a glitter on gold. Furthermore, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) finally approved its new Shari’ah standards on gold, potentially opening up gold...
Continue Reading

Return to Blog Home