Predictably Planning Your Eight-Figure Exit • Financially Simple


I recently had the honor of being a speaker at the Exit Planning Institute’s (EPI) annual summit. Throughout the event, I got to speak to hundreds of financial advisors. Let me tell you, I love opportunities like this where I can meet face-to-face and have engaging conversations with my readers. But one thing struck me during the summit. It seemed that everyone I spoke to was asking the same question… “Justin, how can I plan my exit with certainty?” This just goes to show that there is a very real need for guidance on this subject in the RIA space. That’s why I’m dedicating this entry to predictably planning your eight-figure exit.

Follow Along With The Financially Simple Podcast!

This week on The Financially Simple Podcast:

  • (0:25) The Recurring Question I Get from Financial Advisors

  • (2:15) An Introduction to Strategic Planning in the RIA Space

  • (3:43) Why “Shooting from the Hip” Doesn’t Work

  • (5:35) 8 Stages of Strategic Planning

  • (14:16) The Problem with Strategic Planning

  • (16:31) Grandiose Ideas

  • (17:59) How to Approach Your Strategic Plans

The State of Strategic Planning in the RIA Space

Strategic planning in the RIA space isn’t much different than it is in any other industry. It involves making long-term plans that align with the vision, mission, and values of your firm, while also mapping out short-term actions to support those goals. Simply put, strategic planning is the foundation for success in the RIA industry.

In fact, the 2022 RIA Benchmarking Study by Charles Schwab revealed that 82% of the top-performing firms (those ranking in the top 20%*) had written strategic plans. In contrast, only 66% of firms with over $250 million in assets under management (AUM) and 42% of firms with less than $250 million in AUM had such plans. This highlights the correlation between strategic planning and overall success in the RIA space.

So, if strategic planning correlates to positive growth, why do so many attempt to “wing it” in their business? Well, strategic planning is simple in concept, but it’s hard to implement. It’s hard to execute. That difficulty often leads financial advisors (and other small business owners) to avoid spending the time and energy required of a formal strategic plan. However, this approach will seldom lead you where you desire to be. Instead, you’ll often feel like you’re trudging through mud, generating slow growth (if any) and being exhausted while you do it. How can you change this?

Strategic Planning As an Investment Advisor

The bones of the strategic plan are the same regardless of your industry. Nonetheless, let’s take a quick overview of each of the steps. To develop an effective strategic plan, you must consider the following eight components:

  1. Vision: A compelling vision provides a clear picture of the desired future state of your firm, inspiring both advisors and clients.
  2. Mission: Different from your vision, the mission statement describes your RIA’s reason for being. The mission should be useful in guiding decision-making and defining your firm’s unique value proposition.
  3. Values: Core values serve as guiding principles that shape the firm’s culture, behavior, and relationships with clients.
  4. SWOT Analysis: This is a tried and true method that works across all industries. However, let me challenge you… when you conduct your SWOT, do it from your competitors’ perspectives. See what opportunities your firm’s weaknesses present to your competition and work to strengthen them.
  5. Objectives: Setting specific, measurable, achievable, relevant, and time-bound (SMART) objectives provides a roadmap for progress and success.
  6. Strategies: Strategies outline the broad approaches and tactics to achieve the firm’s objectives, considering factors such as target markets, competitive positioning, and service offerings.
  7. Tactics: Tactics involve the specific actions and initiatives to be implemented to support the strategies, such as marketing campaigns or talent development programs.
  8. Actions: These are the day-to-day tasks and activities that need to be executed to bring the strategic plan to life.

However, none of this will do you any good if you don’t adhere to your strategic direction. That’s why it is essential to align your offerings with your long-term strategy. Many advisors miss this. According to the 2020 RIA Benchmarking Study by Charles Schwab, only 60% of RIAs consider alignment with their strategic plans when offering new services. This highlights the need for a cohesive strategy that supports your firm’s growth and client objectives.

Strategic Plan Development for RIAs

Friends, developing a strategic plan requires a disciplined approach that encompasses various considerations. I believe that’s what Kim Kovalski, Managing Director at MarshBerry, means when she said, “A strategic planning discipline creates a shared vision for the operational, financial, and talent aspirations of your firm. The most successful strategic plans harness the power of a proven framework that challenges conventional processes and forces critical thinking to answer hard questions.”

For instance, when I led my own RIA through the strategic planning process, I encouraged active involvement from all team members to foster a shared vision and commitment. By leveraging a proven framework and challenging conventional processes, we were able to identify untapped opportunities, streamline operations, and align our financial and talent aspirations.

This change in approach had a profound impact on the trajectory of my businesses. We experienced improved clarity and focus in our decision-making processes. You see, with a strategic plan in place, you can allocate resources effectively. Likewise, you can prioritize initiatives and seize growth opportunities that align with your long-term goals. Because of this, our team became more cohesive, motivated, and driven towards achieving our shared vision. So, how can you replicate this in your own firm?

Best Practices for Effective Planning

Over the years, I’ve conducted hundreds (if not thousands) of strategic planning sessions—in my own firm and as a consultant. Based on this experience and other best practices observed in the RIA industry, I’ve come up with some tips for strategic plan development:

  1. Involve stakeholders: Engage team members at all levels of your organization to gain diverse perspectives and foster a sense of ownership and commitment to the strategic plan.
  2. Conduct market research: Stay informed about industry trends, regulatory changes, and client preferences to ensure that your strategic plan reflects the evolving landscape, addressing emerging challenges and opportunities.
  3. Continuously review and refine: Strategic planning is an ongoing process. Regularly review and update the plan to adapt to changing circumstances and optimize outcomes. This also helps to keep you and your team accountable.
  4. Communicate and educate: Share the strategic plan with the entire team, ensuring that everyone understands the firm’s direction, goals, and their individual roles in achieving them. Effectively communicating the plan can unify your team toward the goals.
  5. Measure and track progress: Establish key performance indicators (KPIs) and metrics to assess the progress and impact of the strategic plan. Regularly monitor and evaluate performance against these benchmarks to make informed adjustments as needed.
  6. Embrace flexibility: While a strategic plan provides a roadmap, it’s important to remain adaptable and open to adjustments based on new information or unforeseen circumstances. Remaining flexible enables you to take advantage of new opportunities and to navigate unexpected challenges.

Wrapping Up…

Friends, the eight-figure exit is attainable. However, it’s highly unlikely you’ll get there through happenstance. Instead, you must be intentional about the direction of your firm. By looking forward and creating a plan you can reach your desired outcome. I challenge you to hire a coach to come alongside you. Doing so will cost you money. I get that. However, they will help you avoid the biases you have so you can get out of your own way. An outside consultant can help you drive toward real value growth.

Look, I know life is hard, but life is good. The thought of strategic planning in the midst of an already full schedule is frustrating. But it doesn’t have to be. By bringing your team together, working with a coach, and viewing your firm through the lens of your competitors, you can make planning for the eight-figure exit, at least financially simple. Hey, let’s go out and make it a great day.

Proper and effective strategic planning is a lengthy and difficult process. Don’t try to go through it on your own. Reach out to our team. We have advisors who do this every day and are ready to help you!

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