Index

  • 30-hour threshold:
    • about
    • case study
  • 83(b) election
  • Accountant, on support team
  • Accounting:
    • Financial Industry Regulatory Authority
    • for phantom stock plan
  • Accuracy of valuation
  • Acquisitions
  • Adhesion, client
  • Advertising, for succession team
  • Age of advisors
  • Agreements:
    • antidilution
    • buy-sell
    • continuity
    • contribution
    • enterprise
    • full-ratchet antidilution
    • guardian
    • noncompete/nonsolicitation
    • operating
    • revenue-sharing (continuity plan)
    • shareholders'
    • weighted-average antidilution
  • Annual valuations
  • Antidilution agreements
  • Asset approach to valuation
  • Asset concentration
  • Asset sales:
    • internal buyout
    • third party, selling practice to
  • Attorney, on support team
  • Attrition
  • Bank financing:
    • availability of
    • benefits of
    • case study
    • funding continuity plan
    • for lump sum payout
    • succession planning with
  • Bank of America/Merrill Lynch
  • Benchmark, cautions about
  • Bills, Treasury
  • Bonds, Treasury
  • Bonuses:
    • cash
    • in cash flow modeling
    • stock
  • Books, sharing
  • Book sales, partial
  • Bottom-line focus
  • Business. See also Family business
    • defined
    • as industry percentage
    • perpetuation considerations
    • practice versus
    • ship model for
  • Business growth:
    • employee stock ownership plans and
    • family business
    • in independent financial services and advisory industry
    • as Lifestyle Succession Plan goal
  • Business model:
    • described
    • production model versus
  • Business systems
  • Buyer-to-seller ratio
  • Buyout, internal:
    • about
    • asset sales
    • continuity agreement
    • deal structure
    • events prompting
    • partial book sales
    • stock sales
    • succession plan versus
  • Buyout clause
  • Buy-sell agreements:
    • defined
    • funding
    • goal of
    • purposes of
  • Career length
  • Case study
    • 30-hour threshold
    • bank financing
    • compensation strategy at ownership level
    • consultants
    • interviews and tests for key staff members
    • phantom stock plan
    • practice overview
    • revenue-sharing arrangements
    • succession plan implementation
    • valuation
  • Cash bonus
  • Cash flow:
    • about
    • described
    • equity value versus
    • importance of
    • as incentive
    • present value of discounted future
  • Cash flow modeling:
    • about
    • bonuses
    • equity, investment in
    • profit distributions
    • revenue collection
    • wages, competitive
  • Cash flow quality factors, in valuation:
    • asset concentration
    • client demographics
    • expenses
    • revenue growth and new client growth
  • Cashing out, bank financing for
  • C corporations:
    • employee stock ownership plans
    • as entity structure
  • Certified public accountant (CPA), on support team
  • Change:
    • in organizational structures
    • resistance to
  • Client relationship index (CRI)
  • Clients:
    • adhesion of
    • concerns of
    • demographics of
    • management of
    • new
    • succession plan, telling about
    • succession planning, advantages of
    • tenure of
  • Collaborators versus competitors
  • Collection of revenue
  • Commissioner v. Duberstein
  • Commissions, insurance renewal
  • Commission split:
    • about
    • advantages of
    • case study
    • disadvantages to G-3
    • disadvantages to owner
  • Commitment, lack of
  • Communicating continuity plan
  • Compensation. See also Revenue-sharing arrangements
    • about
    • case study
    • equity (see Ownership grants; Stock grants)
    • list of
  • Competitors versus collaborators
  • Consultants
  • Contingent financing
  • Continuity agreements
  • Continuity partners
  • Continuity planning. See also Continuity plans
    • advisor's age/career length and
    • ownership base, reasons for widening
    • purpose of
    • as succession planning dress rehearsal
    • succession planning versus
    • timing of
  • Continuity plans. See also Continuity planning
    • agreement types
    • annual valuation
    • bank financing, funding with
    • buy-sell agreements
    • communicating
    • components of
    • defined
    • described
    • disability, defining
    • disability insurance, funding with
    • funding
    • guardian agreements
    • involuntary departure of partner/shareholder, addressing
    • life insurance, funding with
    • Lifestyle Succession Plan goals and
    • ownership track, internal
    • planning for funding
    • Practice Emergency Program
    • revenue-sharing agreements
    • spreadsheet format for
    • stand-by arrangements
    • as succession planning step
    • succession plans versus
    • tips
    • trailing 12 months, caution about
    • valuation and funding
    • valuation tips
  • Contribution agreements
  • Control, losing
  • Corporations. See also C corporations; S corporations; Shareholders' agreements
  • Cost:
    • of professional valuation
    • of setting up and running ESOPs
  • CPA (certified public accountant), on support team
  • CRI (client relationship index)
  • Culture:
    • sales
    • shift in
  • Deal structure:
    • asset sales
    • contingent financing
    • continuity agreement
    • internal buyouts
    • partial book sales
    • seller financing
    • stock sales
    • third party sales
  • Defensive strategy
  • Demographics, client
  • Dilution, shareholder
  • Disability, defining
  • Disability insurance, lump-sum
  • Discounted future cash flows, present value of
  • Discounts, minority
  • Diversifying risk
  • Documentation
  • Earn-outs
  • Eat-what-you-kill approach:
    • about
    • advantages of
    • case study
    • disadvantages to G-3
    • disadvantages to owner
  • Economic marriage
  • Emerson, Ralph Waldo
  • Employee benefit plan, employee stock ownership plan as
  • Employee Retirement Income Security Act (ERISA) of 1974
  • Employee stock ownership plans (ESOPs):
    • benefits of
    • cost of setting up and running
    • drawbacks to
    • as employee benefit plan
    • growth rate and
    • guidelines for
    • history of
    • mergers versus
    • selling practice versus
    • statistics
    • taxation of
  • EMS (Equity Management System):
    • about
    • documentation
  • Ensemble Practice, The (Palaveev)
  • Ensembles:
    • defined
    • described
  • Enterprise agreements
  • Enterprise strength:
    • defined
    • revenue strength, balancing with
    • in valuation
  • Entitlement versus opportunity
  • Entity size and entity structure
  • Entity structure. See also specific structures
    • about
    • advantages of
    • business perpetuation considerations
    • entity size and
    • flow-through entities
    • formalities, internal
    • liability considerations
    • ownership of
    • profit distributions and
    • shareholders
    • size and
    • taxation and
  • Equity, investment in
  • Equity-centric organizational structure
  • Equity compensation. See Ownership grants; Stock grants
  • Equity management:
    • defined
    • goal of
    • schematic
    • steps in
    • as succession planning step
  • “Equity Management: Determining, Protecting, and Maximizing Practice Value,”
  • Equity Management System (EMS):
    • about
    • documentation
  • Equity manager, on support team
  • Equity value:
    • about
    • cash flow versus
    • described
    • importance of
    • measuring
    • monitoring
  • ERISA (Employee Retirement Income Security Act) of 1974
  • ESOPs (employee stock ownership plans):
    • benefits of
    • cost of setting up and running
    • drawbacks to
    • as employee benefit plan
    • growth rate and
    • guidelines for
    • history of
    • mergers versus
    • selling practice versus
    • statistics
    • taxation of
  • Evaluation period, for succession team
  • Exit strategies. See also Selling practice
    • about
    • succession plans versus
  • Expenses, practice
  • External sale of practice:
    • about
    • asset sales
    • contingent financing
    • deal structure
    • geography
    • price and terms
    • quality of match
    • seller, average age of
    • seller criteria
    • seller financing
    • stock sales
  • Fair market value
  • Family business:
    • about
    • building versus starting
    • growth considerations
    • opportunity versus entitlement
    • ownership track
    • planning process, starting early
    • talent, importance of
    • valuation
  • Federal Reserve
  • Fee income
  • Financial analysis of succession plans
  • Financial Industry Regulatory Authority (FINRA):
    • accounting
    • entity structure and securities revenues
    • gross dealer concession
    • phantom stock plan
    • rules and regulations
    • succession team
    • transactional revenue
  • Financial Planning Association (FPA)
  • Financial records, sharing
  • Financing:
    • bank
    • contingent
    • seller
  • FINRA (Financial Industry Regulatory Authority):
    • accounting
    • entity structure and securities revenues
    • gross dealer concession
    • phantom stock plan
    • rules and regulations
    • succession team
    • transactional revenue
  • Firm:
    • defined
    • as industry percentage
  • Five-year plans, rolling
  • Flow-through entities
  • Formalities, internal
  • Foundation for success
  • Founding owners. See G-1 (Generation One)
  • FPA (Financial Planning Association)
  • FP Transitions. See also specific topics
    • about
    • Equity Management System
    • as equity manager
    • GlidePath strategy
    • “Independent Financial Service Growth Rate Study,”
    • listing and selling system
    • Practice Emergency Program
    • Research and Analytics department
    • Succession Maintenance Program
  • Full-ratchet antidilution agreements
  • Funding continuity plan:
    • bank financing
    • disability insurance, lump-sum
    • life insurance
    • planning for
    • valuation and
  • G-1 (Generation One). See also specific topics
    • income-perpetuation strategy for
    • multiple-tranche strategy and
    • plans, change in
    • revenue-sharing arrangement, disadvantages of
    • risk, diversifying
    • wages, competitive
  • G-2 (Generation Two):
    • age, ideal
    • contribution agreement signed by
    • empowering
    • hiring, training, and retaining G-3 level succession team
    • money, lack of
    • multiple-tranche strategy
    • number of, ideal
    • partnership track
    • plans, change in
    • readiness, lack of
    • risk, diversifying
    • stock grants
    • valuation and
  • G-3 (Generation Three):
    • advice for
    • empowering
    • hiring, training, and retaining
    • money, lack of
    • multiple-tranche strategy
    • number of, ideal
    • partnership track
    • plans, change in
    • readiness, lack of
    • revenue-sharing arrangement, disadvantages of
    • risk, diversifying
  • GDC (gross dealer concession)
  • Generation One. See G-1 (Generation One)
  • Generation Three. See G-3 (Generation Three)
  • Generation Two. See G-2 (Generation Two)
  • Geographic location:
    • as marketplace demand factor
    • as seller criterion
  • Gilliam, John
  • GlidePath strategy
  • Goals:
    • defining
    • popular
    • profit
  • Goals of Lifestyle Succession Plan:
    • bottom-line focus
    • continuity plan
    • general
    • growth, building
    • income-perpetuation strategy for founder
    • Tranche 1
    • Tranche 2
  • Great Recession
  • Gross dealer concession (GDC)
  • Gross recurring revenue multiple. See also Trailing 12 months
  • Growth:
    • employee stock ownership plans and
    • family business
    • in independent financial services and advisory industry
    • as Lifestyle Succession Plan goal
  • Guardian agreements:
    • described
    • disadvantages of
  • Havens, John J.
  • Health issues
  • Help wanted ad, for succession team
  • Home building analogy
  • IARs (investment advisor representatives)
  • IMCA (Investment Management Consultant Association)
  • Income. See also Cash flow
    • fee
    • independent financial services and advisory industry
    • perpetuation strategy for
  • Income approach to valuation
  • Incubator:
    • about
    • goals
    • Lifestyle Succession Plan
    • minority discounts
    • stock grants
    • in succession plans
  • “Independent Financial Service Growth Rate Study,”
  • Independent financial services and advisory industry:
    • age of advisors
    • career length
    • growth rates
    • history, lack of
    • income statistics
    • rules of
    • talent crisis, solving
    • wirehouses versus
  • Individual books organizational structure
  • Insurance:
    • disability, lump-sum
    • life
    • practices based on
  • Insurance trails
  • Internal buyout:
    • about
    • asset sales
    • continuity agreement
    • deal structure
    • events prompting
    • partial book sales
    • stock sales
    • succession plan versus
  • Internal Revenue Code (IRC). See also Taxation
    • gifts
    • reorganizations, tax-free
    • Section 102(a)
    • Section 102(c)
    • Section 368
    • stock grants
  • Internal Revenue Service (IRS). See also Taxation
    • employee stock ownership plans
    • reorganizations, tax-free
    • stock grants
  • Interviews and tests for key staff members
  • Investment Advisers Act of 1940
  • Investment advisor representatives (IARs)
  • Investment in equity
  • Investment Management Consultant Association (IMCA)
  • Involuntary departure of partner/shareholder
  • IRC (Internal Revenue Code). See also Taxation
    • gifts
    • reorganizations, tax-free
    • Section 102(a)
    • Section 102(c)
    • Section 368
    • stock grants
  • IRS (Internal Revenue Service). See also Taxation
    • employee stock ownership plans
    • reorganizations, tax-free
    • stock grants
  • Job:
    • defined
    • as industry percentage
    • mentality, persistence of
  • Kadlec, Dan
  • Lawyer, on support team
  • Liability considerations in entity structure
  • Life insurance
  • Life Insurance Marketing and Research Association (LIMRA)
  • Life raft model
  • Lifestyle Succession Plan. See also Succession planning
    • described
    • failure of
    • goals of
    • multiple-tranche strategy
    • results of
    • rewards for planning ahead/starting early
    • schematic
    • success of
  • Limited liability company (LLC). See also Operating agreements
    • advantages of
    • described
    • documentation for
    • formalities, internal
    • internal sales
    • onboarding talent with a book of business
    • ownership of
    • profit distributions
    • S corporation versus
    • setting up
    • shareholders
    • taxation of
  • LIMRA (Life Insurance Marketing and Research Association)
  • LLC. See Limited liability company (LLC)
  • Lump sum payout, bank financing for
  • Management, client
  • Market approach to valuation
  • Marketplace demand factors, in valuation
  • Marriage, economic
  • Match, quality of
  • Math, doing the
  • Mergers:
    • acquisitions versus
    • defined
    • employee stock ownership plans versus
    • rarity of
    • taxation of
    • as term
  • “Millionaires and the Millennium: New Estimates of the Forthcoming Wealth Transfer and the Prospects for a Golden Age of Philanthropy” (Schervish and Havens)
  • Minority discounts
  • Minority ownership interest
  • Multiple-tranche strategy:
    • in Lifestyle Succession Plan
    • in succession plans
    • succession team and
  • National Association of Personal Financial Advisors (NAPFA)
  • National Center for Employee Ownership (NCEO)
  • Net new client growth
  • Noncompete/nonsolicitation agreements
  • Obligations created by stock grants
  • Obstacles to succession planning:
    • books and records, sharing
    • change, resistance to
    • control, losing
    • defensive strategy
    • industry rules
    • next-generation personnel not ready
    • next-generation successors lack money
    • own money, paying yourself with
    • sales culture
    • tools/strategies, inappropriate
  • Onboarding talent with a book of business:
    • about
    • contribution agreement
    • evaluation period
    • LLCs
    • S corporation
    • taxes
    • valuation, formal
  • “One class of stock” rule
  • Operating agreements:
    • defined
    • funding
    • goal of
    • purposes of
  • Opportunity versus entitlement
  • Oppression, shareholder
  • Oregon Administrative Rules
  • Oregon Revised Statutes (ORS)
  • Oregon Securities Division
  • Organizational structures. See also specific structures
    • about
    • changes in
    • equity-centric
    • individual books
  • ORS (Oregon Revised Statutes)
  • Owners:
    • founding (see G-1 (Generation One))
    • planned (see G-2 (Generation Two))
    • potential (see G-3 (Generation Three))
    • succession planning, advantages of
    • thinking like
  • Ownership:
    • of entity structure
    • minority interest
    • widening, reasons for
  • Ownership grants:
    • about
    • company withholding/deductibility
    • disadvantages of
    • fair market value/basis
    • obligations created by
    • rules for
    • strategic use of
    • taxation of
    • as tenure issue solution
    • vesting issues
  • Ownership track:
    • continuity plan tips
    • family business
  • Palaveev, Philip
  • Partial book sales
  • Partners, continuity
  • Pay cuts, avoiding:
    • case study
    • cash flow remodeling
    • obstacles to succession planning
  • Payment terms
  • PEP (Practice Emergency Program)
  • Perpetuation, business
  • Pershing, LLC
  • Phantom stock plan (PSP):
    • accounting for
    • case study
    • as cash bonus plan
    • as stock-based compensation plan
  • Planned owners. See G-2 (Generation Two)
  • Planning. See also Continuity planning; Succession planning
    • exit
    • family business
    • for funding continuity plan
    • replacement
    • rewards for
  • Plans, change in:
    • G-1 (Generation One)
    • G-2 (Generation Two)
    • G-3 (Generation Three)
  • Plans, rolling five-year
  • Potential owners. See G-3 (Generation Three)
  • Practice. See also Selling practice
    • business versus
    • buyer demand for
    • defined
    • described
    • expenses
    • gross recurring revenue multiple
    • as industry percentage
    • insurance-based
    • life raft model
    • size of
    • tenure of
    • type of
    • value, effective
    • value, rule of thumb for
  • Practice Emergency Program (PEP)
  • Present value of discounted future cash flows
  • Price, fair
  • Production model:
    • business model versus
    • described
  • Profit distributions:
    • in cash flow modeling
    • entity structure and
    • limited liability companies
    • S corporations
  • Profits:
    • distribution of
    • function of
    • goal for
    • importance of
    • value and
  • Pro forma spreadsheets
  • Promissory note, performance-based
  • PSP (phantom stock plan):
    • accounting for
    • case study
    • as cash bonus plan
    • as stock-based compensation plan
  • Reasons for succession planning:
    • clients, advantages to
    • owners, advantages to
  • Records, sharing
  • Registered Investment Advisers (RIAs):
    • about
    • as succession team members
  • Rejuvenation effect
  • Reorganizations, tax-free
  • Replacement planning
  • Retirement, gradual
  • Revenue:
    • collection of
    • growth of
    • recurring versus nonrecurring
    • strength of
    • transactional
  • Revenue-sharing agreements (continuity plan):
    • about
    • advantages of
    • applicability
    • disadvantages of
    • forms
  • Revenue-sharing arrangements:
    • about
    • advantages of
    • case study
    • disadvantages to G-3
    • disadvantages to owner
  • RIAs (Registered Investment Advisers):
    • about
    • as succession team members
  • Risk, diversifying
  • Risk factors, transition:
    • about
    • client tenure
    • level of
    • noncompete/nonsolicitation agreements
    • practice tenure
    • technology use
  • Rolling five-year plans
  • Sales culture
  • Schervish, Paul G.
  • S corporations. See also Case study
    • about
    • described
    • employee stock ownership plans
    • formalities, internal
    • LLCs versus
    • minority discounts
    • onboarding talent with a book of business
    • “one class of stock” rule
    • ownership of
    • profit distributions
    • stock grants
    • taxation
  • SEC (Securities and Exchange Commission)
  • Section 102(a), of Internal Revenue Code
  • Section 102(c), of Internal Revenue Code
  • Section 368, of Internal Revenue Code
  • Securities and Exchange Commission (SEC)
  • Securities Exchange Act of 1934
  • Seller, average age of
  • Seller criteria:
    • geography
    • price and terms
    • quality of match
  • Seller financing:
    • benefits of
    • in deal structure
    • drawbacks to
    • valuation and
  • Selling practice:
    • about
    • asset sales
    • contingent financing
    • continuity agreement
    • deal structure
    • employee stock ownership plans versus
    • events prompting
    • externally
    • internally
    • partial book sales
    • seller, average age of
    • seller criteria
    • seller financing
    • stock sales
    • succession plans versus
    • succession team, dissatisfaction with
  • Shareholders:
    • dilution of
    • entity structure and
    • involuntary departure of
    • oppression of
  • Shareholders' agreements:
    • defined
    • funding
    • goal of
    • purposes of
  • Sharing books and records
  • Ship model for business
  • Silos. See also Practice
    • defined
    • described
  • SMP (Succession Maintenance Program)
  • Sole proprietorship:
    • about
    • asset sales
    • tax issues
  • Spreadsheets:
    • for continuity plan
    • pro forma
  • Stand-by arrangements
  • Steps in succession planning
  • Stock-based compensation plan, phantom stock plan as
  • Stock bonus
  • Stock grants:
    • about
    • company withholding/deductibility
    • disadvantages of
    • fair market value/basis
    • obligations created by
    • rules for
    • strategic use of
    • taxation of
    • as tenure issue solution
    • vesting issues
  • Stocks, average annual return on
  • Stock sales:
    • internal buyout
    • third party, selling practice to
  • Strategy:
    • defensive
    • rethinking
  • Strength, revenue
  • “Strong man” approach
  • Success, foundation for
  • Succession Maintenance Program (SMP)
  • Succession planning. See also Lifestyle Succession Plan; Succession plans; specific topics
    • case study
    • clients, advantages to
    • continuity planning as dress rehearsal for
    • continuity planning versus
    • enjoying process of
    • importance of
    • obstacles to
    • owners, advantages to
    • reasons for
    • steps in
    • timing of
  • Succession plans. See also Succession planning; specific topics
    • continuity plans versus
    • defined
    • exit strategies versus
    • financial analysis of
    • math, doing the
    • selling practice versus
    • uniqueness of
  • Succession specialist, on support team
  • Succession team. See also Talent
    • dissatisfaction with
    • employees, turning into equity partners
    • formula, secret
    • help wanted ad for
    • hiring, training, and retaining G-3 level
    • multiple-tranche strategy
    • onboarding talent with a book of business
    • success, foundation for
    • super producers
    • talent pool, mining
  • Super producers
  • Support team:
    • assembling
    • CPA/accountant
    • lawyer
    • succession specialist
  • Supreme Court (U.S.)
  • Survey results, cautions about
  • Takeovers
  • Talent. See also Succession team
    • crisis of, solving
    • importance of
    • onboarding
    • recruiting
  • Taxation. See also Internal Revenue Code (IRC); Internal Revenue Service (IRS)
    • of acquisitions
    • of employee stock ownership plans
    • entity structure and
    • flow-through entities
    • of mergers
    • onboarding talent with a book of business and
    • reorganizations, tax-free
    • of stock grants
  • Team, support. See also Succession team
  • Technology use
  • Tenure:
    • client
    • practice
    • stock grants and
  • Tests and interviews for key staff members
  • Texas Tech University
  • Third party, selling practice to:
    • about
    • asset sales
    • contingent financing
    • deal structure
    • geography
    • price and terms
    • quality of match
    • seller, average age of
    • seller criteria
    • seller financing
    • stock sales
  • Time frame for succession planning
  • Time magazine
  • Timing:
    • of continuity planning
    • of succession planning
  • Trailing 12 months. See also Gross recurring revenue multiple
    • balancing revenue strength and enterprise strength
    • caution about
    • effective value and
    • rules of thumb concerning
  • Trajectory, workweek
  • Tranche 1:
    • about
    • goals
    • Lifestyle Succession Plan
    • minority discounts
    • stock grants
    • in succession plans
  • Tranche 2:
    • about
    • goals
    • Lifestyle Succession Plan
  • Tranche 3
  • Transactional revenue
  • Transition risk factors:
    • about
    • client tenure
    • level of
    • noncompete/nonsolicitation agreements
    • practice tenure
    • technology use
  • Treasury bills
  • Treasury bonds
  • UBS
  • U.S. Federal Reserve
  • U.S. Supreme Court
  • Valuation:
    • accuracy of
    • annual
    • asset approach to
    • case study
    • cash flow quality factors
    • client relationship index
    • cost of
    • fair market value
    • family business
    • funding continuity plan and
    • G-2 (Generation Two) and
    • income approach to
    • insurance-based practices
    • market approach to
    • marketplace demand factors
    • onboarding talent with a book of business
    • profitability and its impact on value
    • questions about
    • reasons for
    • revenue, recurring versus nonrecurring
    • transition risk factors
    • valuation multiples, range of
  • Value. See also Valuation
    • effective
    • fair market
    • payment terms and
    • profits and
    • realizing
    • rule of thumb for
  • Vesting issues
  • Wages, competitive
  • Wealth, transfer of
  • Weighted-average antidilution agreements
  • Wells Fargo
  • Wirehouses, multigenerational
  • Workweek trajectory
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