Today's Viewpoint: A MarshBerry Publication

Perpetuation Planning: Protect Your Legacy & Optimize the Value of Your Wealth Management Business

The best way to protect your legacy and to optimize the value of your business is to invest in your business now to ensure that growth is embedded in your firm’s DNA at the time of sale or transfer. But this requires commitment – of both time and financial resources. Only you can decide whether it’s important that you hand over a business that is poised for growth: one that will thrive well into the future, or one that simply inches along? Whatever your decision, the implications on business valuation are significant. Discover the importance of a perpetuation plan with MarshBerry.  

When business leaders think about perpetuation planning, they tend to focus on the who and the how oftentimes at the expense of the what. Who is going to take over my business? How will the sale be financed? A business owner may have children in the business or maybe grooming a key employee(s) to take over. Perhaps the ultimate plan is to sell to a third-party or merge with another group. The question that many business leaders fail to ask, however, is what will my business look like when I turn over the keys?

The best way to protect your legacy and to optimize the value of your business is to invest in your business now to ensure that growth is embedded in your firm’s DNA at the time of sale or transfer. But this requires commitment – of both time and financial resources. Only you can decide whether it’s important that you hand over a business that is poised for growth: one that will thrive well into the future, or one that simply inches along? Whatever your decision, the implications on business valuation are significant.

New business origination is the panacea in the wealth advisory space where client assets inevitably shift from accumulation to distribution over time. Just to keep pace, advisors need to bring on new, younger clients. Furthermore, the historic bull market may have helped mask weak underlying new client growth. Stock performance over the next five years may not mimic the previous five years. What will happen to your revenues and cash flow if/when the market declines?

MarshBerry challenges clients to establish aggressive top-line growth targets, generally helping them commit to doubling revenues (on a market adjusted basis), every five to seven years. The pathway to achieving this level of growth is based on investing cash flow back into the business. This helps firms to recruit new advisors, train and develop junior advisors, and reprioritize time away from managing the administrative functions of the business towards more value-added client and prospect facing efforts.

The Importance of a Perpetuation Plan

As a leader of an advisory business the last place you should be spending time is on administrative functions. The unfortunate reality is that unless you have the scale to support a C-Suite, and are viewed as a “platform” business, most acquirers ascribe little value to the middle- and back-office processing and administrative support. Generally speaking, the majority of sellers wind up migrating to the buyer’s technology, corporate and operational platforms post-deal close. Since the buyers in the market set valuation expectations, this is relevant to the value of your firm whether you seek to perpetuate internally or externally.

Partner with an External Party When Business Exit Planning

If you do not have the resources, whether financial or otherwise, to grow your business on your own, you may consider partnering with an external party sooner rather than later. Many of the buyers in the marketplace provide wealth advisors with the tools, products, and operational support that can help increase and accelerate the growth of your client bases. Some buyers even provide warm leads to advisor partners through centralized business development capabilities.

Regardless of when your perpetuation clock starts, it’s important that you have a vision for what you want your business to be and that you take the steps necessary to realize it. The good news is that there is no shortage of options available to you.

If you have questions about Today’s ViewPoint or would like to learn more about how MarshBerry can help your firm with perpetuation planning, please email or call Kim Kovalski, Managing Director, at 440.769.0322.


MarshBerry is excited to announce it advised more than 95 companies and completed 130 M&A transactions (83 sell side/47 buy side) in 2021, closing another record year for the firm. MarshBerry continues to remain the number one sell side advisor for the 23rd year in a row and retains the top spot in the industry for total number of clients advised.

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MarshBerry continues to be the #1 sell side advisor in the industry (as ranked by S&P Global). If you're considering selling your firm, we are the best choice to help you through the complicated process. If you don't hire MarshBerry, hire a reputable advisor that can help you navigate one of the most important business decisions you will ever make. You will be much better off having an advisor in your corner that knows the industry than trying to do this on your own.