ambitions “may grow antsy and
want to leave, perhaps taking cli-
ents with them.”
Throughout the white paper,
CLS emphasizes the role a third-
party money manager can play
in assisting advisors with succes-
sion—one primary example of
which is simply handling the man-
agement of client assets so that ad-
visors can focus on client acquisi-
tion and retention.
That approach is illustrated in
the case of its affiliated advisor David
Van Rask, who credits “outsourcing
the investment management component to CLS and a couple of other
managed account platforms” as a key
part of his strategy to build up the
equity in his financial planning firm.
Like Harrell, but in reverse, Van
Rask has sought to capture the value
of the firm through family, having
worked side by side with his father,
who founded the firm, gaining the
trust of established clients.
Looking toward the firm’s future, Van Rask has brought on a
junior advisor—and far from contemplating a sale of his business,
Van Rask is looking to buy, networking with older advisors to explore M&A opportunities.
The CLS white paper suggests
numerous other ways for advisors
to avoid becoming a “hostage to
attrition” that is par for the course
of aging advisors presiding over assets dwindling as their own aging
clients withdraw money, die, transfer wealth to heirs or because advisors themselves fail to reinvest in
These include buy-sell agree-
ments with other advisors, part-
nering or merging with other
firms, building up the capabilities
of staff, but especially employing
CLS cites research by FA Insight
that firms employing junior advi-
sors report 44% greater income and
15% asset growth compared with
firms not hiring them.
That approach is exemplified by
Larkspur Financial Advisors, one
of whose principals, Rick Arellano,
is 81 and still actively involved in
“What if I live to be 100 or
more? I really like my lifestyle and
don’t particularly want to change
it. As long as my mind is still
strong, I want to continue working with my clients,” says Arellano,
who relies on staff for day-to-day
operations, maintains a home office and continues to work on his
terms and timetable.
His partner Ron Murphy,
though only in his 60s, can similarly enjoy a greater than ordinary
degree of flexibility, having developed the capabilities of his staff and
invested in technology.
Murphy will bringing on a new
advisor from a large wirehouse and
will start to cut back, focusing mainly
on “A clients.” He credits his ability
to do so on the investment his firm
has made in staff and infrastructure.
Dave Huber, whose Huber Financial is another case study in the
paper, integrated both family and
junior advisor approaches to succession, having once made the mistake
of selling to an aggregator. When
the firm experienced difficulty, he
bought back its stock.
By hiring his son, 28, and a junior advisor, 42, the 57-year-old has
signaled to clients that their firm is
in it for the long haul.
“It is definitely a competitive advantage to be able to show to new
clients that you have stability and a
strategic plan to continue the firm,
particularly as many advisors don’t,”
he is quoted as saying.
With those personnel assets in
place, Huber now takes long vaca-
tions “without having to talk to the
office at all.”
The bottom line may be that the
best time for an advisor to sell his
CLS Investments CEO Todd
Clark, in an e-mail exchange
with Research’s sister publication
ThinkAdvisor.com, affirms this
“Even though the advisor may
have passed on, the culture of
the firm can live on,” says Clarke.
“This culture can continue to provide value to the clients and ensure
their financial success for generations to come.”
An earlier version of this article was
published at ThinkAdvisor.com.
“What if I live to be
100 or more? I really
like my lifestyle and
want to change it.
As long as my mind
is still strong, I want
to continue working
with my clients.”
Larkspur Financial Advisors