In both cases, he adds, these strategies are done internally and give the parties the opportunity to maximize the new firm's value. "This is a huge shift from the past," says Goad. "And both methods are client-centered."

Success is determined by the terms of the deals, too. Neither type requires a capital outlay or down payment, a requirement that ordinarily leaves out scores of potential buyers who can't come up with the necessary cash. This opens the door to many more merger candidates, giving the seller the opportunity to apply higher standards for his successor in terms of desired skill level and experience.

Why have Goad's two strategies met with such great success? "In essence, these merger strategies recognize, more than in years past, that client relationships are more sticky to the current advisor; therefore, a sudden change of advisor through the external sale method sounds too risky to late-career advisors. Our mergers simply mimic an internal succession, which leaves clients feeling more comfortable. Instead of looking for an external buyer, the soon-to-retire solo advisor looks for a local and credible early- to mid-career advisor who is willing to entertain moving their physical presence into the veteran advisor's business, or vice versa. They share office expenses and map a plan for the transference and sale of part or all of the entity and/or its clients."

Another advantage, says Goad, is that the process can be accelerated or slowed down to address market concerns or slow client acceptance or problems in the working relationship. "The advisors never officially merge, and they continue to live off their own books. If desired, the seller can keep some of his clients into semiretirement and create a contingency buy/sell for the balance of those clients with the new advisor."

Is the solo-to-ensemble model truly viable? To answer this question, we solicited a second opinion from Mark Tibergien, former Moss Adams executive in charge of in-depth industry studies and the CEO for Pershing Advisor Solutions LLC. Having consulted on numerous advisor mergers and successions, Tibergien expressed his views on the ideal solo practitioner succession plan: "There comes a point when the advisor must think about how to align him or herself with a firm that will serve his clients well, either due to a contingency or an orderly transition. [Solos] have difficulty giving up control, but they must think about how to ensure their clients' welfare isn't disrupted by the advisor's bad health or his decision to retire. In fact, it's his fiduciary duty to ensure continuity of advice to his clients."

How to do it, then? "Many solos have cross-purchase agreements with other solos. In spirit, this is a wonderful approach, but in practice, it's not so good. Usually, the other individuals are the same age or they're operating at capacity, so this tends to be an emergency measure." Ideally, says Tibergien, the advisor should enter into an agreement with a larger practice or merge his practice into a larger practice three to four years before his planned exit. The advantage, he says, is that the larger firm has younger people who can be developed, so there's no capacity problem.

How about bringing in a partner three to four years before retirement? "The problem with bringing in a partner is it simply doesn't work out sometimes." Is Goad's succession plan a viable alternative, then? "It's a reasonable proposition," says Tibergien, "because the challenge for the seller is to know how culturally compatible a merger candidate will be with his clients. Most sellers are sensitive to how clients will be dealt with, so any kind of co-habitation makes sense to develop familiarity."

Of course, there's still the downside that the merger isn't going to work, leaving the advisors back at square one. "That's just part of the risk of being a solo practitioner," says Tibergien. "There will be fewer succession options, and anytime you create an economic tie-in with another firm, you create disruption if the deal must be undone."

"It's always interesting to see how tentative relationships work out. If the advisors' attitudes are 'Let's see how it works' instead of having a strategy that says 'Let's see how we can make it work,' then the merger is probably doomed. It's not just 'Let's share our toys and enjoy the sandbox together.'" Tibergien adds that advisors must not just let fate define their success, but instead work toward an end game.

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