Advisers have a unique opportunity to help entrepreneurs who may not have considered developing an exit plan from their business. It starts with a conversation that doesn't leave wealth managers looking like they are nosing around or foolish because they are asking about a client’s business.

Owning and running a business is a very personal endeavor, and wealth managers can get into trouble by asking the wrong questions.

Business owners preside over valuable assets that should be taken into consideration in a client’s holistic financial profile. I believe that with education and the right vernacular and questions to ask, advisers can learn more about their clients’ business assets and effectively integrate them into a financial plan.

A good starting point starts with these questions:

  • Why are you in business?
  • What do you want to accomplish through your business?
  • Do you want to create a pile of gold and if so, what’s your time frame?
  • Do you want to eventually turn your business over to your children?
  • Do you want to run this business until you die, or sell the business and then retire?
  • What’s the time horizon for selling your business?

By starting the conversation with on-point questions, wealth managers can help their clients articulate their goals, consider their future plans for the business and develop a strategy for exiting the business.

Bear in mind: If a client’s wealth manager isn’t asking these questions, then who is? More often than not, the sale or transition of a business causes these business owners to reassess their financial plans and even their financial advisors. By engaging the client pre-transaction, wealth managers can help solidify their long-term relationship.


Most wealth managers want to create a portfolio and manage assets for the benefit of a client and typically generate income in retirement. But that’s not always the need. It’s important to understand your business owner clients’ motivations and goals and help them understand how these fit into their lives and financial plans. Like fingerprints, no two clients are exactly alike.

For example, I know the head of a distribution company who is now in his 90s with no plans to retire, turn over his business or sell it. He simply expects to come to his office every day and live out the remainder of his life doing exactly what he’s been doing for the past 60 years. The business, a valuable asset, will transfer to his estate.

There’s no need to scope out an exit strategy and no need to sell the business and set up a stream of income for retirement. A wealth manage can still discuss with this type of client how to make the business transferrable upon the client's death.

In another example, I know a successful business run by two father-and-son pairs, four partners in all. The fathers have expressed very definitive desires to retire in 2025, at which time they will either sell the remainder of their business to the sons or someone else.

This should be an easy situation for a wealth manager to work with, right? Except that none of the four individuals are on the same page in terms of what they want. The wealth manager must navigate these conflicting expectations.


Once wealth managers understand the goals and objectives of their clients, then they can help guide them as to the right time to sell their business and how to structure the sale. Markets will vary and are cyclical. So are the prices that businesses will fetch. Like ice cream maker Baskin-Robbins and its 31 flavors, sales of businesses can be structured in variety of ways, each with different functions and features.

Business owners will need to consider whether they wish to sell to a financial buyer who is buying their business asset for its financial return, or to a strategic buyer who may be a competitor.

It’s a good idea for a wealth manager to work with an expert or specialty firm who can provide consultation on all of these points so that a client gets the right purchaser at the right price and at the right time.

Remember that wealth managers are also very important in the aftermath of the sale of a business, and that’s not just for incorporating those new assets into the portfolio. They often serve as prospectors for clients as well. Don’t be surprised if among your business owner clients some sell their businesses and race back to you asking to find another business to buy.

Entrepreneurs are notorious for being happily immersed in the day-to-day of a business. Many miss that once they sell. Reinvesting assets into a new business can all be part and parcel of the client’s customized financial plan. In the end, this may be the most valuable role an adviser can play for the business-owing client.

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