I Asked ChatGPT How to Sell My Advisory Business
Since the world is all buzzing about AI replacing human jobs, I asked it to do mine recently. It was an interesting thought experiment, and I thought I’d share it with you. I’ll add a few comments, but I’d love your feedback on what you found interesting, half-baked, or generally entertaining.
(As a note, this might make for good marketing for you as an advisor. Ask ChatGPT to answer your client’s most common questions and see what happens!)
My Prompt:
I'm a financial advisor. I have a $500 million AUM practice with a second generation of advisors upcoming. While I'd like to have an internal succession plan, none of them can afford to purchase the value of the business. What other options might I have for selling my business, including any creative ideas for internal succession?
This is a pretty common scenario I’m hearing these days. I was curious as to what GPT would spit out, which I’ve included below. I’ll bold my thoughts for contrast.
ChatGPT’s Answer
ChatGPT: That's an exciting (and tricky) stage to be in—especially with a $500M practice and a potential internal bench. You have a few solid options, both traditional and creative. Here’s a breakdown:
1. Internal Succession (Creative Financing Options)
Your successors may not have the capital now, but there are structures to help them buy in over time:
Seller-Financed Buyout
Structure: You finance the purchase with a note. They pay you over 5–10 years out of the cash flow of the business.
Benefit: You maintain control and maximize value, while grooming the next generation.
Risk: You're dependent on their success (and integrity) to get paid.
Phantom Equity / Synthetic Equity
Structure: You grant “equity-like” interests to successors, tied to firm growth/profitability.
Goal: Incentivize growth and transition without actual equity changing hands right away.
Exit Plan: Later convert those phantom units into a formal buy-in at a valuation discount or with financing support.
Earn-In Structure
Structure: Advisors earn equity based on revenue generation, client retention, or leadership roles.
Flexibility: You set the pace and can layer in performance incentives.
Partner with a Strategic Capital Provider
Bring in a minority partner (RIA roll-up, aggregator, or PE-backed platform) to provide liquidity to you and a buy-in mechanism for your junior team. You stay on during the transition and structure a longer-term exit.
Mike’s Thoughts
This was interesting. Seller-financed buyouts and minority partners are the one’s I’m hearing the most about these days, as they address the liquidity issue most directly.
I would also say that, while it’s not internal succession, I’m seeing some great success for closely held firms that are willing to explore seller-financed exits to other boutique firms with similar culture and strong financials. The timeline flexibility can greatly sweeten the deal for a small, strong acquirer without sacrificing comp for an owner. Plus, the distributed tax bracket.
2. External Sale (But Keep It in the Family)
You can sell externally and still preserve internal succession:
Sell to a Larger RIA / Aggregator with a Built-in Succession Plan
Many aggregators love strong teams and are happy to keep your advisors on board.
You can negotiate terms where your junior team is groomed for leadership and eventual ownership.
Some even provide equity incentives to your team as part of the deal.
Merge with a Peer Firm with Succession Capacity
If you know another advisor or RIA with strong operations and succession depth, a merger can solve both your retirement and continuity needs.
This can be a way to spread risk and ensure clients are taken care of.
Mike’s Thoughts
“Nothing will change” is arguably the soundbite everyone goes to when talking about aggregators or PE involvement, and succession planning is its own risk when we’re talking about this. While there are good case studies, I also know far too many broken promises found in sales pitches.
Partnerships, while risky as well, might offer better outcomes when there are high levels of parallel culture and processes. Be incredibly picky here, don’t write off mergers as succession plans.
Bonus Creative Concept: “Advisor Incubator”
If your junior advisors aren’t quite ready, you could:
Form a joint venture with a larger firm to mentor your team, fund the buyout, and help them become owners over time.
You stay involved as a chairman/mentor, help grow the business further and create a formal path to succession.
Mike’s Thoughts
I found this one interesting as I’m currently talking with a firm that has successfully leaned into the chairman model. It’s a unique thought that you could retain ownership while being increasingly (if not fully) removed from the operations and serve primarily as a mentor to the next generation of leaders. This can absolutely extend the runway for your successors to build towards a buyout, as well as improve the valuation if possible.
What Did You Think?
I would be remiss if I left out ChatGPT’s final line:
Would you like help mapping out one of these in more detail—or even seeing what your firm might be worth under each scenario?
I can also tell you that they almost unilaterally suggested buyouts from LPL, Merrill Lynch, and other big names.
And yes, those firms do have all the financial backing in the world to give advisors lucrative exits. That said, what happens if you don’t want to sell back to the mothership? There are far more acquirers out there than people realize because they’re not prolific marketers in the M&A space. What do they have instead? Incredible culture. Strong financials. A long-term vision that’s not built and sold to PE.
I’m here to help advisors land anywhere that represents the best fit for them, but this is increasingly important when you would prefer more options than a small handful of mega-firms with deep pockets. Go a few degrees further when you want the next generation you’re building to be a key part of your company and clients’ futures.
So, in short, ChatGPT isn’t half bad, but there’s still the human piece that is huge. ChatGPT reads (and believes) the marketing materials, but we need to keep a human pulse on what’s happening in advisor transitions.