Tuesday, July 9, 2024
HomeFinancial Advisor#FASuccess Ep 393: Taking The Risk Of A Multi-Million-Dollar Succession Loan To...

#FASuccess Ep 393: Taking The Risk Of A Multi-Million-Dollar Succession Loan To Make The Business What You Want It To Be, With Alex Lewis

Welcome everyone! Welcome to the 393rd episode of the Financial Advisor Success Podcast!

My guest on today’s podcast is Alex Lewis.  Alex is the owner of Blackbridge Financial, a hybrid advisory firm based in Irmo, South Carolina, that oversees approximately $330 million in assets under management for 415 client households.

What’s unique about Alex, though, is how, at age 29, he took on a multi-million-dollar loan to purchase the firm from its founder as his successor, and, in the 4 years since, has made changes to everything from the staff to the technology to the service structure to make the business what he wanted it to be… and in the process, nearly doubled the firm’s AUM.

In this episode, we talk in-depth about how Alex gained the trust of his firm’s founder and its clients by gradually increasing his client-facing responsibilities over a span of 4 years in advance of a potential succession, how Alex and the firm’s founder negotiated a valuation and transaction terms with a seller-financed note with protective covenants that met the needs of both parties, and how Alex got comfortable with a purchase whose first monthly loan payment was higher than his entire annual salary the year before the purchase and resulted in a net income of just $11 in the 1st year after the deal (but ultimately grew enough that he was able to refinance his succession loan to make the former owner whole and reduce the monthly payment).

We also talk about how Alex’s firm now segments clients into 5 service tiers based on their assets under management and revenue (and the actual differences in services the firm provides to clients at each level), how Alex tracks his clients’ individual preferences to create what he calls “Wow Factors”, such having their favorite soda on the table when they arrive for a meeting, which strengthens the relationship between clients and the advisory team, and how Alex, shortly after taking over the firm, made the decision to hire 2 new advisors and support them through getting their CFP marks to be able to continue to offer high-touch services for his rapidly growing client base and ensure they stay under 150 clients per advisor.

And be certain to listen to the end, where Alex discusses how he first entered the financial planning industry, transitioning from the world of public accounting to seek better work-life balance but taking a more-than-50% pay cut to get his foot in the door, how Alex managed to not lose a single client after being forced to call all 400 clients to let them know he had to raise their fees after a service provider dramatically increased its own pricing to Alex’s firm… only to cancel the fee increase after the service provider reversed course (and how that action in turn built even more trust with his clients), and how Alex dug into a series of business books to identify best practices to systematize his own firm’s operations, from Gino Wickman’s “Traction” to Matthew Jarvis’ “Delivering Massive Value”, as he continues to evolve the business he bought from its prior owner into the one that he wants it to be for himself.

So, whether you’re interested in learning about navigating an internal succession plan, handling the financial realities of taking on debt to purchase the firm, or creating a plan to grow the firm and its staff after taking over, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Alex Lewis.

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