We are all seeing and feeling the effects of the "Great Resignation.” Most of the advisors that I talk with are still busy helping their clients answer the question, “Can I?” as more and more people want to join the “Big Quit.”

I get the feeling that some advisors are asking the similar questions about their own lives and businesses. The tone of my conversations with them has a decidedly less optimistic mood these days. 

The social aspect of our businesses has been altered. Advisors tell me it is not as fun as it was in the past. While I can’t tell you for sure, I think there is a correlation between this advisor mood and the record mergers and acquisitions activity among Registered Investment Advisers (RIAs) and advisory firms last year (and the projections for this year). Many are seeing the multiples and selling. 

But is it a good deal to sell now?

Eyes of the buyer

We always encourage our readers to put themselves in the shoes of their clients, understand their perspectives, and tailor services to their needs. Now, instead of thinking like a seller, can you put yourself in the shoes of a potential buyer of your firm? What do they see?

  • Aging advisor burnout = more opportunities for acquisitions 
  • Small business inefficiencies (easily remedied)
  • Potential to pay only two or three times earnings (quickly recoupable with cost savings and long-term client relationships)
  • Potential to increase wallet share from existing clients
  • Growth prospects by entering new markets

No wonder private equity and large buyers are snapping up firms at a historic clip. It is good to be a buyer right now. 

Is a backlash coming?

With all the acquisitions referenced in the press, I have noticed some interesting pushback, albeit via Twitter. One person said that the mega RIAs are the “wirehouses of the future.” Another suggested that RIAs always discussed their independence as a differentiator. Will that still hold up when they are now part of a massive firm? A few have discussed the challenges of moving from an independent business owner to an employee of a large firm—a small cog in a big wheel.

Personally, I don’t see acquisition firms slowing down anytime soon. They have too much money to spend and the businesses they are buying are too profitable once they bring them into the fold. 

So what do you do?

Get out there and celebrate

As a leader, you must set the tone for your firm, even if you are not “feeling it” right now. What tone are you going to take? We can either focus on the Big Quit like our clients, or we can look at the opportunities we have in front of us. There is money in motion, more people to help, and staff that can use a pick-me-up. Think about what you can do to motivate employees and build on the successful business you have. 

Here are a few ideas to get you started:

  • Celebrate your success in 2021. By all accounts, last year was a very profitable year for most advisors. January is a great time to celebrate your (and your team’s) success. Can you go beyond year-end compensation or bonuses, and think about how to create a memorable experience for the team tied to the success of 2021? Show them you care.
  • Create a story or narrative for any clients that you started working with in 2021. Share what you accomplished together. The progress that you have made will tie back to why you got into the business in the first place: to help clarify financial decisions for people in need. How beautiful is that?
  • Look at the clients that you helped retire in 2021 (and will in 2022). You helped make that possible for them! Take some credit, or as my father-in-law would say, “take a victory lap.”
  • Get back to marketing. Kick the year off with a goal of one or two marketing events in the first quarter. Get those juices flowing again; build some excitement for you and the team.
  • Get a little angry. Whether it is true or not, tell yourself, “Those rollups and private equity firms buying businesses are looking at inefficient firms that they can buy on the cheap.” Refuse to be one of those firms. Set goals and get motivated to be better than that.

I am looking forward to a great 2022. The challenges will be there, but so will be the rewards—one client at a time. It isn't time for the great resignation yet—things are just getting fun. Enjoy your success!


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