Finishing Well Retirement Options for Financial Advisors John Williamson- Wells Fargo Advisors Financial Network Innovation and Growth

Finishing Well Means.. Still being part of the business Staying involved after the sale Customizing my plan to sell Getting to finally travel Being able to pick my successor My clients are taken care of Moving to Arizona Volunteer More Making a clean break Taking care of my team Doing more charity work Finishing Well Means.. Moving to Colorado A good client experience Going back into teaching Moving to Florida Getting paid for my practice Still being part of the business

Talking Points M&A Trends Retirement Options to Consider Communication Planning Ahead and Next Steps

How do I get started? Why do advisors How do I interpret a Valuation? sell their practice/business? How do I interpret a Valuation? How do I evaluate potential buyers? Do I need to have my practice valued? How do I tell my clients? Who pays the closing costs? What financing options are available? What is the difference between a merger and an acquisition? When is the right time to retire? What do sellers miss most? How do I prepare to acquire a practice? What are barriers to moving? How do I tell my staff? How do I prepare to sell my practice? What is the difference between exit and succession? What generally is the process? Who do I use to prepare the legal documents? How do I get started?

Business Transition Trends Merger and Acquisition Highlights Merger, Preparation, Geography, Exit Use of Third Party Resources Examples: Truelytics, Live Oak bank, PPC Loan, Oak Street Funding, etc.. Finding a Match - Fit & Networking

Retirement Options to Consider… General Description Time Horizon Client Experience Considerations Sunsetting Plan Employee advisor/ wirehouse retirement option- revenue share sale. Terms and conditions are prescribed by the Broker Dealer. The sunsetting time horizon is five years or less. Minimal operational changes for clients. The broker dealer provides the solution for the customer and the advisor. (BD is more involved) Less customization but turnkey; Broker Dealer provides terms of agreement. Advisors may lack choice of successor; Tax implications (compared to other options) Exit Asset sale between two advisors/ practices. Independent sale option. Negotiated terms. Typically involves down payment and seller financing. Deal structure typically over 1-3 years often resulting in the complete sale of the practice. Assuming the right fit, good client communication strategy should lead to a good transition and client experience. Customized retirement plan offering flexibility. Will require third party resources. Poorly crafted client communications can lead to client attrition, client communication planning needed. Succession Gradual sale to another advisor (next generation) typically within the seller’s practice. Typically a phased approach that takes place over 5 to 10 years. Continuity for clients as the successor is usually known to them. The positive client experience occurs due in part to a gradual and planned transition. Seller is able to customize terms of succession and successor. Option for independent advisors. Will require third party resources & succession consulting. Longer time horizon- Planning ahead needed. Private Listing Independent Advisor contracts with a third party listing service (typically) and sells their practice utilizing that listing service. Negotiated terms. A sale that takes place in generally less than 3 mos. Terms of sale vary. Accelerated Exit. Clients experience change and may experience moving to another Broker Dealer. The listing service provides the match for the seller and advisors need to conduct efficient due diligence. Option for independent advisors. Generally a contractual obligation for the Advisors and requires an efficient client communication plan.

Client Transition Client Communication Communication Strategy In the absence of communication… Communication Strategy Call, Letter, Call The Operational Process Project Team

Project Team Checklist Finish Well Program Example Valuation Deal Structure Timing Project Team Communication Outstanding Loan Analysis Client Communication Strategy Client Communication (Statements/ BD Notification) Financing Business Overlap/ Accommodation (ex. Portfolio Discretion) Practice Structure (ex Multiple Locations) Term Sheet/ Letter of Intent Documents/Contracts

Planning to Finish Well Practice Valuation Understand Firm (your BD) Resources and Options Interview Third Party Resources Build a Networking Plan? Continuity Plan Needed? Consult with Your CPA Consult with Your Attorney

Example Third Party Resources www. truelytics.com www.oakstreetfunding.com www. liveoakbank.com www.ppcloan.com www. successionresource.com www.fptransitions.com www.echelon-partners.com

How do I get started? Why do advisors How do I interpret a Valuation? sell their practice/business? How do I interpret a Valuation? How do I evaluate potential buyers? Do I need a valuation? How long will a sale take? What financing options are available? What is the difference between a merger and an acquisition? When is the right time to retire? What do sellers miss most? How do I tell my staff? How do I tell my clients? How do I prepare to sell my practice? What is the difference between exit and succession? Who do I use to prepare the legal documents? What generally is the process? How do I get started?