Ep 393: Taking The Risk Of A Multi-Million-Dollar Succession Loan To Make The Business What You Want It To Be with Alex Lewis

Financial Advisor Success

Michael Kitces

News, Business, Entrepreneurship, Business News

4.8 • 696 Ratings

🗓️ 9 July 2024

⏱️ 90 minutes

🔗️ Recording | iTunes | RSS

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Summary

Alex Lewis is the owner of Blackbridge Financial, a hybrid advisory firm based out of South Carolina that oversees approximately $330 million in assets under management for 415 households. At just 29 years old, Alex boldly acquired his firm through a multi-million-dollar loan, stepping in as the successor to the founder. Over the past four years, he has transformed the business by overhauling the staff, technology, and service structure—nearly doubling the firm’s AUM in the process.

Listen in as Alex shares how he gained trust and smoothly transitioned into ownership by increasing his client-facing roles and negotiating a seller-financed purchase, setting the stage for financial challenges that included managing a hefty initial loan payment. You'll learn how his firm categorizes clients into five service tiers, tailors experiences with personal touches like preferred beverages, and expands the team to uphold a high-touch service model, ensuring each advisor manages no more than 150 clients. We also discuss Alex’s career shift from public accounting to financial planning, his strategic fee adjustments that reinforced client trust, and his use of influential business strategies from books to continuously refine and grow the firm he envisioned.

For show notes and more visit: https://www.kitces.com/393

Transcript

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0:00.0	Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with
0:07.1	financial planner, speaker, and consultant Michael Kitsis to hear stories of how leading
0:12.4	financial advisors navigated the inevitable challenges that arise on the path to success
0:17.4	and get insight from leading industry consultants about how to break through to the next
0:22.2	level in your advisory business. And now here's your host, Michael Kitsis. Welcome, everyone.
0:28.9	Welcome to the 393rd episode of the Financial Advisor's Success Podcast. My guest on today's
0:34.2	podcast is Alex Lewis. Alex is the owner of Blackbridge Financial, a hybrid advisory firm based in Irmo, South Carolina,
0:41.2	that oversees approximately $330 million in asset center management for 415 client households.
0:47.3	What's unique about Alex, though, is how at age 29, he took on a multi-million dollar loan
0:51.7	to purchase the firm from its founder as his successor,
0:54.5	and in the four years since, has made changes to everything from the staff to the technology
0:58.8	to the service structure to make the business what he wanted it to be, and in the process,
1:04.3	nearly doubled the firm's AU.M. In this episode, we talk in depth about how Alex gained the trust
1:10.1	of his firm's founder and its clients by gradually increasing his client-facing responsibilities over a span of four years in advance of a potential succession.
1:18.6	How Alex and the firm's founder negotiated a valuation and transaction terms with a seller finance note with protective covenants that met the needs of both parties.
1:27.3	And how Alex got comfortable with a purchase whose first that met the needs of both parties.
1:32.1	And how Alex got comfortable with a purchase whose first monthly loan payment was higher than his entire annual salary the year before the purchase and resulted in a net income of just $11
1:37.5	in the first year after the deal, but ultimately grew enough shortly thereafter that he was
1:42.5	able to refinance his succession loan to make the former owner whole and reduce the monthly payment.
1:48.0	We also talk about how Alex's firm now segments clients into five service tiers based on their
1:52.6	assets under management and revenue and the actual differences in services that the firm
1:56.3	provides to clients at each level. How Alex tracks his clients' individual preferences to create what he
	...

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