Succession Planning. Sarah Simoneaux, CPC Simoneaux Consulting Services

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Succession Planning Sarah Simoneaux, CPC Simoneaux Consulting Services Sarah Simoneaux, CPC, Simoneaux Consulting Services Sarah Simoneaux is the founder and president of Simoneaux Consulting

1 Succession Planning Sarah Simoneaux, CPC Simoneaux Consulting Services Sarah Simoneaux, CPC, Simoneaux Consulting Services Sarah Simoneaux is the founder and president of Simoneaux Consulting Services. SCS specializes in strategic planning, business consulting, qualified plan technology consulting, retirement plan services firms best practice development, and qualified plan technical and soft skills training. SCS nationwide customer base includes third party administrators, recordkeepers, financial institutions, financial advisors, broker dealers, and other service providers in the retirement services industry. Simoneaux earned her Certified Pension Consultant designation with the American Society of Pension Professionals and Actuaries (ASPPA) in 1988, and she served as President of ASPPA in She served as a Technical Education Consultant for the Enrolled Retirement Plan Agent (ERPA) education program and as an ASPPA Educational Programs Advocate. 1

Sarah Simoneaux, CPC, Simoneaux Consulting Services She is the author of the textbook, Retirement Plan Consulting for Financial Professionals, and is the author of the NAPA Certified Plan Fiduciary

2 Sarah Simoneaux, CPC, Simoneaux Consulting Services She is the author of the textbook, Retirement Plan Consulting for Financial Professionals, and is the author of the NAPA Certified Plan Fiduciary Advisor online course. She recorded the ASPPA DC-1 web course used in the ASPPA Qualified 401(k) Administrator (QKA) and Qualified Pension Administrator (QPA) programs. She is a regular columnist in ASPPA s Plan Consultant and NAPA s NAPA Net magazines, and co-authors a quarterly column in The Journal of Pension Benefits on retirement organizations best practices. 2

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4 Service Providers Service Providers 4

5 Service Providers Service Providers 5

Strengths SWOT Weaknesses Opportunities Threats CULTURE Environment Structure Reputation Rituals Rewards Sample SWOT Analysis Strengths

revenue sources Partner with RIA Bundled unbundled approach TPA Weaknesses Technology Succession Fear of change Lack of sales culture No

6 Strengths SWOT Weaknesses Opportunities Threats CULTURE Environment Structure Reputation Rituals Rewards Sample SWOT Analysis Strengths Boutique-level services Trained staff Technology Attention to detail Understanding the rules Opportunities Control orphan plans New revenue sources Partner with RIA Bundled unbundled approach TPA Weaknesses Technology Succession Fear of change Lack of sales culture No business plan or documented processes Threats Broker referral source loss Commoditization of services Bundled providers Tax reform Economy 6

7 Culture Why Buy? 7

growth Critical mass to build efficiencies Acquire

Eliminate a competitor Expand geographically

to cheaper resources Expand into new markets

8 Why Buy? Increase volume and revenue Faster than organic growth Critical mass to build efficiencies Acquire strategic relationship or specialized expertise Eliminate a competitor Expand geographically National presence Few regional TPAs in area Access to cheaper resources Expand into new markets Additional plan types Broader spectrum of plan size served Expanded scope of services Potential Candidates 8

9 Successful Acquisition: Case Study Unsuccessful Acquisition: Case Studies 9

competitiveness Become part of a larger firm Capitalize on

10 Why Sell? Why Sell? To create an exit strategy Realize the value of your equity; cash out Pave the way for your own retirement Lessen your personal risk Avoid a fire sale later To strengthen competitiveness Become part of a larger firm Capitalize on additional resources or services Benefit from economies of scale Have access to additional capital for growth 10

11 Sellers: Exit Strategies Sell to an external third party Sell to one or more existing partners Bring in a new partner with the goal of selling and/or transitioning to that partner Sell and/or transition to one or more family members Sell and/or transition to one or more key employees Seller Goals How much is enough? What terms are you willing to accept? What are the tax consequences? When is the ideal time to sell? How long do you want to stay on after the sale? What role(s) do you want to take on after the sale? Retaining legacy, culture, local presence Retaining staff Retaining clients and level of servicing Taking firm to the next level 11

12 Potential Candidates Successful Sale: Case Study 12

13 Unsuccessful Sale: Case Study Pitfalls 13

14 M&A Alternatives Simoneaux & Stroud Consulting Services Communication 14

15 Communication Simoneaux & Stroud Consulting Services 15

16 Communication: What Matters Communication: Who Matters Supervisors and employers Coworkers You put your employees first and if you take care of them, then they will take good care of you. Then your customers will come back, and your shareholders will like that, so it's really a unity." Advisors/sales personnel Plan sponsors Participants Vendors Other stakeholders 16

affect the employees How the acquisition will affect

17 Employee Communication What is happening and why Who the acquiring firm is How the acquisition will affect the employees How the acquisition will affect the clients Employee Communication: The Contrarian View 17

18 Key COI Messages What is happening and why Who the acquiring firm is Relationships > money How the acquisition will benefit the relationship Continued high level of service 18

19 Delivery of Messages Who? Business owner (key relationships) Primary contact/strongest relationship senior level When? Initial notice to advisors prior to plan sponsors Ongoing check-ins How? Face to face key relationships Calls s Webinars (with Q&A sessions) 19

4/12/2016. Millennials: Who are They and Why You Should Care. Sarah Simoneaux, CPC, President, Simoneaux & Stroud Consulting Services

4/12/2016. Millennials: Who are They and Why You Should Care. Sarah Simoneaux, CPC, President, Simoneaux & Stroud Consulting Services Millennials: Who are They and Why You Should Care Sarah Simoneaux, CPC, President, Simoneaux & Stroud Consulting Services 1 Sarah Simoneaux, CPC, President, Simoneaux & Stroud Consulting Services Sarah