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What is the End Game of Your Financial Services Agency?

Posted by Scott Tietz, CLU on Wed, Mar 20, 2019 @ 12:00 PM

There is no right or wrong way to build a financial services agency or marketing company. The direction an owner initially begins with may not be the direction he or she finally ends up with. However, all owners need to think about where their company is headed. 


There are three main reasons owners build their agencies:

  1. Build to Sell
  2. Build for the Future
  3. Build for a Job

Understanding the real reasons behind why an agency was built will help give owners important indicators to figure out the best means to grow, change, adapt, and navigate future changes. It will also help them understand how or if they want to approach a future merger or acquisition. 

1. Build to Sell

This has worked well for many people – especially before the current economic downturn. There are always buyers for a profitable, well-run company. If that is the goal, once the distribution and production bases are created, expenses should be lean and mean. Remember, the only way to create profit for the owner or a potential buyer is to increase revenue or decrease expenses.

2. Build for the Future

This used to happen a lot with children taking over the family business. It was business as usual from generation to generation. But today’s agency is so much more complex than just 10 years ago that many children are not capable of taking over. Or, just as likely, they do not want to take over the family business. Some owners are better off selling the agency and helping their children in another business venture.

3. Build for a Job

Many owners may have built their agency because it afforded them the opportunity to own their own company and have the freedom to do anything they wanted. Many of these people don’t have a succession plan and have no one to take over in case of a catastrophic illness or death.


Looking Forward

Every agency’s growth plan should include possible purchases and mergers. Agencies can create synergies, get talent, and create an instant distribution channel far more quickly through a purchase or merger than by doing it organically. Succession plans can be created by merging companies and having partners.

If you’re looking to exit your business, we literally wrote the book on mergers and acquisitions in our industry. Request the Mergers & Acquisitions 101 eBook to discover what all independent marketing organizations need to consider to survive and thrive in today's changing business landscape.

Mergers & Acquisitions 101




This content is for informational and educational purposes only and is not designed, or intended, to be applicable to any person's individual circumstances. It should not be considered as investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action.

This blog is for educational purposes only. The information provided should not be construed as an offer to buy or sell a security or any ownership interest in another organization by Partners Advantage Insurance Services, LLC. An offer to buy an insurance services company or other type of business entity is made by a formal written document following a due diligence period and review of the applicable laws of the appropriate jurisdiction.

Partners Advantage Insurance Services, LLC and their representatives do not give tax or legal advice. You should not treat any opinion expressed by the author as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion and experiences. Accordingly, any tax information provided is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Encourage your clients to consult their tax advisor or attorney.