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Practice Management > Succession Planning

Finding the Right Fit; Getting the Right Advice

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In the case of Darrell Reese and Paul Kink, the fact that they were both Raymond James advisors was an important factor in Reese’s quick and seamless purchase of Kink’s Montana advisory firm. But they say they were lucky in their timing, and that they share the same values, thereby making the transition that much smoother.

“If I hadn’t found Darrell, though, it wouldn’t have been easy,” Kink admitted.

He had planned for his daughter to take over his practice, but she had other plans, “and you can’t force your children to do what you want them to do. So if I hadn’t met Darrell, I’d have [needed] to have my practice appraised, state that I wanted someone to pay me up front, and I would have been really worried about my clients.”

In a business where client-advisor relationships are often deep and meaningful, (Kink has been an advisor for 50 years and is serving fourth-generation clients), methodical succession planning is paramount. That’s why for Live Oak Bank, the buying and selling of practices is about much more than simply providing funds.

Much of the bank’s work in the advisory space is about providing consultative advice, said Jason Carroll, managing director for investment advisory lending at Live Oak. The bank’s intent is to help advisors and Live Oak itself understand a transaction from start to finish, and make sense of both parties’ strategies and goals.

“We want to mitigate the risks of both the buyer and the seller, and we want to be assured that it’s a good transaction, that all the clients will stay with the practice,” he said. “For us, it’s about the structure of the transaction and only then does the money come into play.”

Carroll added, “We’re operating at zero defaults right now. We want to keep it like that, so it’s not all about the money, but about strategy, about cultural fit and whether clients can be looked after in the same professional manner.”

— Read “How Live Oak Bank Is Solving Rias’ Succession Problem” on ThinkAdvisor.


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