Exit planning may feel overwhelming.

It requires the assessment of your current personal and business situation, along with your post-transfer goals and needs, both financial and non-financial. It must be a comprehensive assessment in order for each potential transfer method to be analyzed for feasibility. Working with an advisor who is uniquely trained in this discipline is crucial to this overall development and success of this specialized plan.

Two Practice Structures for Advisors

Advisors in this field are usually categorized in two main practice structures. Understanding the differences can assist you in making an informed choice.

  • Captive exit planners 
    • Are employed by banks, wealth management firms, or brokerage houses.
    • Their purpose is to have discussions with business owners about their exit scenarios.
    • They may also be smaller individual practices who sell other services, such as wealth management, merger and acquisition, business brokerage or insurance, or others.
    • Their fees may be derived from a combination of planning fees and commission on the sale of products or services. The planning phase may also be included as part of an initial assessment free of charge.
  • Non-captive boutique firms 
    • Approach exit planning from a comprehensive holistic perspective and are not usually directly involved in another industry.
    • These planners generally are compensated as consultants on a project basis, via a fixed fee or hourly.
    • This planning is usually more comprehensive and is completed in phases, which can include assessment, analysis, and implementation.
    • They work in collaboration with other advisors, usually serving in the role of “quarterback,” making sure the planning work is done in accordance with the owner’s goals and objectives.

Choosing the Right Transition Advisor for You

Here are three key criteria for finding the right advisor and ensuring it goes smoothly:

Do Your Due Diligence

Although each type of advisor can be equally qualified, you should fully understand the specific exit planner’s role, compensation methods, and focus to assist you in making an informed selection. Determining their years of experience and training and seeking references are all part of doing your due diligence on any professional and should be part of the process in enlisting the services of these specialized exit planners.

You and your exit planning professional share the responsibility of a successful outcome throughout the process.

Keep Open Communication

Imagine going to your doctor and telling only part of your symptoms while expecting him or her to give you a correct diagnosis and treatment. This is an individualized plan, and the integrity of the result will be determined not only by the talent and experience of the planning professional but also by your candor and openness during the process. Communication and teamwork are of utmost importance with you and your advisors.

Make Sure They Keep Confidentiality

In addition, the planner has the responsibility to seek and involve other professionals who have expertise in areas outside his or her own scope of specialty or licensing. Of course, keeping the entire process confidential is always of great importance. As with all your advisors, whether a professional is in a discipline that requires licensing or not, he or she should be working within a framework of honesty and integrity where your best interest is the focal point.

We all exit our businesses, whether planned or unplanned, by our design or due to an unexpected event. Taking no action now will most likely lead to a less than desirable outcome for you and your business. The time and investment spent preparing for your exit is trivial when compared to the possible consequences of not being prepared due to a lack of planning. Protect your largest asset and the wealth trapped inside by planning well in advance for your eventual transition. Secure the proper exit planning advisor, do the planning, and rest assured knowing the future of your largest asset and your financial future are secure.


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