Silver Tsunami of Business Owners Retiring Offers Wealth Management Opportunity
The 'silver tsunami' of business owners retiring is upon us, presenting a significant opportunity for wealth managers. Millions of entrepreneurs are set to sell the businesses they've built, involving complex decisions that can permanently shape their net worth. Corporate finance professionals and wealth managers play a crucial role in navigating these challenges.
Wealth managers can become trusted allies to business owners by profiling and anticipating their needs years ahead of a potential exit. They can introduce the right corporate finance or M&A specialists to help understand market timing influences, terms, and funding options. This collaborative approach drives optimal deal terms and increases the likelihood of closing within a defined period.
The strategy for wealth managers includes planning for an estate, participating in growth, and optimizing the exit. They are adept at coordinating with tax and estate professionals to help minimize clients' tax burden during business sales. Banks and investment banks, such as PNC Bank and US Bank, are already collaborating with asset managers to prepare the sale of companies by aging business owners.
Advisers who are well-versed in working with business owners should begin advising years in advance of a transaction. This proactive approach helps avoid losing clients to other wealth managers and ensures entrepreneurs receive the best possible guidance during this critical time.
The aggregate amount of wealth to be transferred due to the 'silver tsunami' is staggering, with as much as 90% of successful entrepreneurs' net worth tied up in their appreciated business. Wealth managers, by becoming that trusted ally and introducing the right experts, can help business owners make the most of this significant opportunity.
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