Business Planning

By Rick Peterbok

How Many Advisors Have a Comprehensive, Detailed, Business

Plan that includes an Action Plan for Implementation?

Planning Research*

• 7% have executed a successful plan• 15% are ready to implement a plan• 28% are refining their plans• 44% said they are thinking about creating a plan• 6% aren’t even thinking about having a plan

*Investment News Advisor Survey

Value of Business Planning*• Better Results – Advisors with a plan have over 3 times

the revenue as those with an incomplete or no plan.• Better Sale Value – 75% of Advisor firms with a plan have

a succession plan. • Saves Time• Less Stress• Provides Clear Structure and Direction

*Investment News Advisor Survey

The Value of Your Advisor Business

Year Multiple of Gross Recurring Revenue

2000 2.002002 2.052004 2.102006 2.162008 2.302010 2.312011 2.33

*FP Transitions

Buy Out Terms*2011

• Down Payment – 36%

• Balance/Performance Payment Schedule – 3-5 Years

*FP Transitions

1 to 1.25

Times Gross Income Minus Expenses

The Value of a Transaction Based Business

• Establish Goals (specific with Time Lines)

• Strategy• Elements of Business

Necessary for Success (Do Yourself or Outsource)

• Key People/Personal

• Office Needs• Geographic Location(s)• Skills Necessary for

Success• Inventory of Current

Position• Competition• Financials

Preparing a Business Plan

Only A Partial List

Critical for Successful Business Plan

• Prove to Yourself it is Achievable

• Write Plan Narrative so Anyone Could Understand It (Especially if needing financing or investors)

• Commit and Implement

Why Someone Doesn’t Plan?

Optional Business Planning Workshop

1:30 – 2:30

• Leadership and Staff• What Products and Services can the Rep offer• Professionalism• Advisory Relationships• Scalable Business Processes• Technology• Financials

Broker Dealer

• On boarding process for Reps• What are the annual hard cost to the Rep• How does the BD support the Rep/Client• What is the Compensation Structure• What are the terms and conditions surrounding recruiting

new Reps• What are the OBA guidelines• What is the compliance environment• Is there a minimum production level

Broker Dealer

• How is the business processed• E & O• Email service• Commitment to growth• What types of check and balances will we have• How will we communicate…for operations, compliance, and

financials• How are audits handled• Other…

Broker Dealer