Key national, regional and community banks are quickly becoming serious buyers. Leading acquirers run the gamut from JP Morgan and Wells Fargo to Bessemer Trust and SunTrust Banks. "Every little bank in between wants to be in your business, and they've got clients. They want to give them to you to capture revenues," says Roame. "If you're thinking of selling, it can really pay to reach out to the bankers in your area."

The deals can be lucrative for principals, even when the bank acquirer is fairly small. Case in point: Essex Savings Bank in Essex, Conn., acquired a 60% stake in John W. Rafal & Associates, which had $900 million in assets under management. It paid $5 million and secured the right to buy the remaining stake in the business (valued at $3.5 million at the time) before 10 years from the close of the transaction. (The valuation of the firm was calculated as follows: 1% of assets + 3x gross revenues + 7x net profits divided by 3.)

Last but not least, planners are selling to partners and employees. These types of sales account for 25% of the deals recorded in the past three years. The upside, says Roame, is control. "If a planner wants to retain control, they usually try to sell to an employee." These in-house deals, however, don't always produce the best results and may not be the most lucrative. "You know that guy you've been paying peanuts for years?" Roame asked participants at the Financial Advisor Symposium. "Where's he supposed to come up with the money to buy your firm now?"

While planners who want to stay in the director's seat for years to come often opt for this type of arrangement, they owe it to themselves to consider all types of buyers that may be interested in their firm. There may be deals that give them more control than they imagine, consultants like Roame say.

While it can be difficult for an entrepreneur to hand over the reigns of his planning shop, the real hindrance to achieving a good sale may be their failure to plan for retirement. More than 40% of advisors report they plan to retire in the next one to 15 years. "Unfortunately, what we see happen all too often is an advisor decides they want to retire in September and expects to exit in December. That doesn't work," says Roame.

Realistically, you should expect to take six months to a year to value, benchmark, dress up and strategize the sale of a practice, even if finding a buyer and effecting the sale happens quickly. Remember, you still have to ensure a smooth transition. Most smart planner-acquirers and even strategic buyers like banks and CPA firms, require planners who are selling their practice to stick around in a meaningful capacity for one to three years to ensure maximum client retention.

You've spent years building your firm. Does it really serve your wallet, employees and clients to rush to the exit? "Most planners simply don't spend enough time benchmarking their practice to learn where their strengths and weaknesses are," Roame says. "There are a lot of planners out there who have higher profit margins and younger clients than the average firm, but they don't tell the buyer that, so it is never considered in the selling price." Failing to benchmark your firm means you don't have the opportunity to use your strengths to negotiate a better deal.

Planners also do themselves a disservice by failing to do a valuation on their firm. Most planners can probably do one themselves, though a professional valuation costs from $2,000 to $3,500, depending on your size.

SIDE BAR 1:

Are You Really Prepared to Sell?