Buying or selling a financial advisory practice involves careful consideration of various deal structures, each offering unique benefits for both parties. The outright purchase is often favored for its simplicity, allowing a single payment or structured financing to complete the transfer and establish clear terms for valuation and handover. 

Another common structure, the gradual buyout, lets sellers retain majority ownership while the buyer assumes increasing responsibilities over time, fostering a smoother transition. In contrast, internal succession emphasizes long-term mentorship, preparing a junior advisor for eventual ownership through training and relationship-building with clients.

 Advisors nearing retirement often use these strategies to secure their legacy and maximize their practice’s value. For advisors or firms unsure about structuring a sale, industry specialists can assist with valuations and guide the decision-making process.

Finsum: It’s also very important to get an accurate valuation estimate of your practice regardless of which method you settle on. 

Municipal bonds have taken a significant hit after Donald Trump’s election as president, following a sharp selloff in U.S. Treasuries amid concerns over potential deficit-expanding policies and inflationary effects. 

Benchmark municipal yields spiked, echoing the Treasury market’s movements as investors reacted to the likelihood of Trump’s economic plans impacting inflation. Many state and local governments had already rushed to issue bonds before the election, leading to high issuance in October, but new sales were sparse this week. 

Despite the volatility, analysts like Lyle Fitterer of Baird predict bond issuance will recover in time, driven by the U.S.'s substantial infrastructure needs. A Republican victory also stirs concerns that tax cuts could reduce demand for tax-exempt municipal bonds, with JPMorgan analysts highlighting the risk to the tax-exemption status itself. 

Finsum: It’s also worth noting how inflation is going to potentially affect these assets, because there is strong chance inflation will increase under the new regime. 

Focusing on others can be challenging, as our brains are naturally wired to center on self-related thoughts and needs. Research by Shenbing Kuang highlights this tendency, showing that our attention defaults to self-focus, which can hinder effective communication, especially in client interactions for financial advisors. 

Self-focus is linked to activity in the medial prefrontal cortex, while focusing on others activates a different brain area, the temporoparietal junction; however, the prefrontal often dominates, drawing us back to self-related concerns. 

Advisors can counter this bias through mindful awareness and empathy, training themselves to recognize inward shifts and refocusing on clients' needs. By consciously practicing empathy and active listening, advisors can enhance their client relationships, building trust and understanding.

Finsum: This is a great way to focus on personal growth as an advisor and find a way to form deeper connections with clients. 

Succession planning remains a critical yet often overlooked issue in the financial advice sector, with a substantial portion of advisors nearing retirement. A recent Cerulli report highlights that nearly 40% of advisors, representing over $11 trillion in assets, plan to retire within the next decade, underscoring the urgency for succession strategies. 

Advisors without a clear plan risk devaluing the business they’ve built, while thoughtful succession planning can help protect and even enhance this value. Cetera has assisted in numerous advisor transitions and acquisitions, providing advisors with resources to prepare for both anticipated and unexpected exits. 

Proper succession planning ensures continuity, whether through expected retirement or unexpected events like disability, safeguarding both the advisor's legacy and family’s future. 

Finsum: Strategic succession plans prioritize choice, flexibility, timing, and control, helping advisors smoothly transition.

Asset managers are increasingly rolling out tax-managed products, with investments in these vehicles seeing notable growth. Assets in tax-managed separately managed accounts (SMAs) surged to over $500 billion, a 67% increase within 18 months, while tax-managed mutual funds grew by 22% to $73 billion, according to Morningstar. 

Direct indexing dominates tax-managed SMA assets, offering customized tax management by investing in individual stocks within an index, though other strategies like ETF model portfolios and active equity are gaining traction. 

Morgan Stanley’s Parametric leads this area, managing $245 billion, mainly through direct indexing. Morningstar anticipates direct indexing will stay prevalent, but asset managers like JP Morgan’s 55ip and AB are exploring alternatives, focusing on model portfolios and municipal bonds for tax advantages. 

Finsum: We may see more unified managed accounts, which integrate various investment types, creating more comprehensive tax management options.