Success is determined in the planning. There are essential actions that entrepreneurial financial advisors should take to accelerate firm growth and fundamental steps required to plan for business succession. While growth and succession can be accomplished using a DIY approach, there are benefits (professional and personal) that come with working with a strategic alliance to achieve these goals.

In this Q&A, Brian Shapiro, Wealth Advisor Alliance advisor development officer, makes the case that advisors achieve greater success accelerating firm growth and planning for a seamless succession with the support of an outsourced provider.

You consider yourself to be an emissary for entrepreneurial advisors. What stands out to you as critical when helping advisors make the right choices for their practice?

When working with entrepreneurial advisors, they naturally want to build and lead a successful business. However, it is important for them to really consider what is the best and most efficient use of their limited time and resources. I ask advisors to contemplate what provides them the most energy and/or satisfaction between being an advisor or running a business. As their practices grow, they often find themselves wearing too many hats. Once we answer this question, then we can explore solutions that will help them with business planning and an appropriate end goal in mind.

What is the most overlooked part of the succession planning process that advisors should be considering?

I think the people component is often not prioritized enough. I have seen both the owner and the successor get too caught up in the valuation and multiples and not spend enough time considering how the various succession solutions will affect their clients, employees and even the seller. Owners should not just look to sell to the highest bidder. They should carefully analyze the cultural fit and ensure that the successor will maintain a similar client experience. Then, they can work on the math.

When you see a successful advisor hesitating to break away, how do you counsel that advisor about the reasons to become an independent advisor?

Advisors who are hesitant to break away tell me they do not want to deal with the burden of compliance oversight. The wirehouses and large firms tend to exaggerate the risks associated with running your own compliance as a deterrent to prevent advisors from breaking away. However, if you structure your practice the right way — fee-based advice and a straightforward, uncomplicated investment approach — there is very little risk and not a ton of time spent maintaining your own compliance program.

Once advisors move past their initial hesitation, we discuss how great it is to have the autonomy to run your own business with uncapped upside. You can be your own boss and design and implement a great client experience.

Where are advisors spending most of their time, and should they be reallocating that time and energy elsewhere?

Advisors typically get into the business because they want to provide great service and solutions to clients. However, they eventually realize there is a lot more that goes into creating and running an advisory practice than the client aspect. There is compliance, marketing, technology, managing vendors, etc. Then, as the practice grows, they may begin hiring people and managing employees. Ideally, advisors should look for solutions that allow them to outsource most of the non-client facing activities, so that they can concentrate on being advisors and growing their practice. Put another way, advisors should concentrate their efforts and energy on the business, not in the business.

What type of ownership and payout structure do you advocate and why is it better for an advisor over the long run?

In terms of structure, there are really three paths in my mind:

The first is the traditional path of building your own business as a solo entrepreneur. This path gives you the ultimate control and ownership, but as complexity increases, more of your time is demanded by hiring and managing people, rather than meeting with clients and building the business.

The second path is one where you take outside capital or join a firm where your equity stake is fixed. This gets you a platform that can enable incredible scale and let you focus on what you love to do — serving clients and new business development. This works really well but has one big downside, you effectively give up part of the ownership in what you are building. If you have given up 50% of the equity, you have to hope you can build something more than twice the size.

The last path is less common, and what we are trying to build at Forum, our parent company. Our equitable partnership model allows entrepreneurial-minded advisors to join a platform that delivers scale, while maintaining full upside in the growth of their business. Each partner office keeps the equity and profits associated with their own office, including all future growth, while contributing to the shared infrastructure. Like a TAMP, it removes the complexity of trading, billing and reporting, but because all the advisors are part of the same firm it also fully centralizes the functions of marketing, compliance, human resources, and operations.

We should also speak to the downside of each equity structure. For example, some would call the last path an eat-what-you-kill model, which it essentially is, so how to do you address the negative connotations of such an equity model? In our partnership, we try hard to balance the personal upside with a collaborative culture. Partners and advisors recognize that they have unique areas of expertise. They can deliver better advice to their clients by relying on each other when those areas come up. One partner might know more about taxes, for example, while others know more about estate planning, charitable giving, special needs planning, digital currencies, or insurance. Each can call up the others to consult freely on a case or bring each other in on big cases where a co-advisory relationship might be needed. The trick with any equity structure is to recognize its strengths and shortcomings.


As Advisor Development Officer, Brian focuses on recruiting like-minded advisors and Registered Investment Advisor firms to join Forum Financial Management (WAA’s parent company). Through a consultative approach, Brian works with firms to uncover their needs and challenges to identify ways that a partnership with Forum would be beneficial to their business.

We help advisors establish and grow successful wealth management practices. To learn more about how we can help you amplify your life’s work, contact us at You can follow us on Twitter@theWAAlliance and on LinkedIn.

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