It really will pay to be thorough and accurate. Which is why it's more problematic than ever to cobble your ADV disclosure forms from those written by folks at other firms. "What we're seeing in some cases is ADVs that are not related at all to what the firm is doing," says Jennifer Aracri, a consultant with National Compliance Services Inc., Delray, Fla. "I just got through reading a client's ADV and it's a mishmash of other firms' services. Eventually a regulator or competitor is going to catch on. Send an incorrect ADV to a regulator and you'll spend a year communicating back and forth," warns Aracri.


Have Fun

If you're tired of hearing about succession planning, take heart. Your clients may be well taken care of in the event of your demise-despite you. One or two spouses of deceased or disabled planners call buyer-and-seller matchmaking service FP Transitions monthly. David Grau, president of the Seattle-based online service, says he is now regularly handling sales for surviving spouses. "We're finding that when the firm is listed within 30 days of the precipitous event, survivors are getting full value. We're seeing a 90% to 95% retention rate of acquired clients. And the whole deal, start to finish, is taking on average just 21 days, with between 20 and 25 buyers vying for the firm."

This along with other mounting data from FP Transitions is taking at least some of the hot air out of the imperative for elaborate succession planning, including the strategy of taking on partners. Grau says that 98 out of 100 sellers don't plan on shedding their business until several months before they list their firms with FP Transitions. "It's almost an impulsive decision. They don't sell to retire but to take on another opportunity, and they don't wait until retirement age," says Grau, who notes that the average seller is age 55 to 57.

"People in our business are conditioned to believe that a partner or employee must take over internally. That's fine, but our data and experience is that it doesn't add value. It just adds another layer of bureaucracy and someone to get rid of if you want to sell. You'll lose value if you hand out ownership prior to selling," Grau says.

Obviously, this shouldn't stand in the way of advisors dedicated and determined to build large firms. But it should provide some comfort to sole practitioners who have been worrying what might happen to their clients and firms next.

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