Acquisition - Case Study

Book of Business Details:

Broker Dealer – Lincoln Financial Advisors (LFA)

Agent Age – 57

AUM - $10 Million

# of Clients – 5

Lines of Business – Managed Money (AssetMark), Mutual Funds Direct, and Annuities (AIG)

Electronic CRM – Yes. Redtail

Assistant – Yes. Several partners and assistants.

Relationship – We had known the advisor for about a year.

Time Frame:

Approached – March 2018

Continuity Plan Placed – None

Agreement Placed – April 2018

Transaction – April 2018

Payout Period – 1-time payment

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Summary:

We had known this advisor for about a year or so and had done some joint work with him. He notified us in March that he would be leaving LFA within 60 days to go to a new Broker/Dealer. He wanted to “sell” some of his clients we had done some joint work on that he did not want to be a part of anymore. We had to move quickly to put in a transaction document on the clients and a 1-time payment valuation on them. Since he was changing Broker/Dealers, we could not have him on the contracts anymore and Lincoln did not like the idea of on ongoing payment to an advisor outside of LFA.

We were able to come to an agreement quickly on valuation and got Lincoln to agree to the 1-time payment. We explained to the clients how the other advisor had left, but we were still going to be here. While this type of transaction can feel the most impersonal, it is important for advisors to know you have it as an option, if structured correctly.

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