Eric Godes of FP Transitions - The Foundation of a Successful Succession Plan

Mar 14, 2023

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Succession planning is essential for any organization to ensure its long-term sustainability and success. However, creating a successful succession plan is not as simple as identifying potential leaders and hoping for the best. What are the steps that organizations need to take to develop a robust and effective plan?

In this episode, Rusty and Robyn talk with Eric Godes, Senior Vice President and Senior Consultant at FP Transitions. Eric has been a pioneer in the wealth management industry. At Fidelity Investments, he helped to launch the first-ever ever home stock trading system. Also, he founded one of the country's first Registered Investment Advisors, Kobren Insight Management. At FP Transitions, Eric works with financial advisory firms across the country to help them reach all their goals, including internal and external solutions.

A longtime leader in the wealth management industry, Eric talks with Rusty and Robyn about succession planning and how it works. He also speaks about the foundation of a successful succession plan, the compensation structure, and finding the right partner.

Key Takeaways

[04:08] - Eric's career history in wealth management and what led him to FP Transitions.
[06:58] - An overview of Eric's role at FP Transitions.
[08:27] - How Eric defines succession planning.
[10:07] - The elements of an internal succession plan.
[13:02] - The foundation of a successful succession plan.
[14:27] - How a firm's compensation structure impacts an internal succession plan.
[15:38] - What advisors should know about synthetic or phantom equity.
[17:35] - The qualities to consider when designing a successor team.
[19:33] - What good revenue growth looks like in an internal succession plan.
[21:30] - The current market drivers for succession planning.
[22:48] - The alternatives firms can use if their internal succession plan isn't well-positioned.
[23:25] - How advisors can find the right succession planning partner.
[27:45] - How consolidators fare in the M&A market.
[31:55] - Eric's favorite investment strategy.
[33:16] - How Eric maintains his ability to perform at a high level.
[34:52] - The people Eric is professionally thankful for.
[37:33] - Eric's recommendations for content.

Quotes

[08:57] - "Succession planning is a thoughtful, well-planned transition from one generation to the next. It doesn't happen at the moment, but it's usually a lengthy process." ~ Eric Godes

[13:22] - "A stronger, growing, and thriving business will be more attractive to successors. It's also going to help them afford the succession plan financially." ~ Eric Godes

[17:45] - "The first thing most owners would think about is, ‘does my potential successor have the same value set that I have?’ It's hard if you're not thinking similarly about the clients, the business, and what's best about servicing the clients." ~ Eric Godes

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0476-OPS-2/15/2023