Most advisory practices today are beautifully fragile businesses that could collapse overnight.
Why? Because they lack succession planning and, perhaps more importantly, continuity planning.
It’s the “elephant in the room,” an uncomfortable truth that many advisors know but don’t talk about. Practices generating $650,000 to $750,000 annually on $50 million in assets, representing $3 million in business value, are entirely dependent on one person staying healthy and nothing going wrong.
In his latest Linkedin article, Silver Oak CEO Billy Hopkins shares a conversation with Jim Zipursky, head of our M&A consulting arm, about Warren Buffett’s approach to business valuation. He pointed out that if you’re the sole relationship manager, operations head, salesperson, and engineer all rolled into one, your business would get a 40-60% discount from any serious buyer. And the reason is simple: when you’re gone, the business can’t sustain itself.
Billy’s article breaks down four major disruptions that can derail even successful practices: health issues, loss of key staff, technology failures, and client departures. These aren’t hypothetical scenarios; they happen every day across our industry, and most advisors aren’t prepared.
What makes this piece particularly valuable is the clear distinction between succession planning and continuity planning. Succession planning assumes you’ll be around to execute the transition. Continuity planning prepares your business to operate when you can’t. Great succession planning can only happen on the foundation of solid continuity planning.
The solution requires a fundamental mindset shift from “I am the business” to “my business can thrive beyond me.” The article outlines practical steps to start taking now: cross-training teams, documenting processes, consolidating technology systems, and spreading client relationships across multiple people.
For any advisor whose practice represents more than 20% of their personal estate, you won’t want to miss Billy’s actionable advice that could mean the difference between building wealth and watching it disappear.
Check out the full article here.
