Ep 501: Navigating Succession Planning That Doesn't Turn Out As Expected (Even When You're Doing Everything Right) with Rick Kahler

[upbeat music] Welcome to The Financial Advisor Success Podcast, where you go behind the scenes with financial planner, speaker, and consultant Michael Kitces, to hear stories of how leading financial advisors navigated the inevitable challenges that arise on the path to success, and get insight from leading industry consultants about how to break through to the next level in your advisory business.

And now here's your host, Michael Kitces.

Welcome, everyone.

Welcome to the 501st episode of The Financial Advisor Success Podcast.

My guest on today's podcast is Rick Kahler.

Rick is the founder of Kahler Financial Group, an RIA based in Rapid City, South Dakota, that oversees approximately $300 million in assets under management for 130 client households.

What's unique about Rick, though, is how he, despite taking all of the right steps when it comes to succession planning, ended up having multiple false starts before eventually completing a deal with an external buyer.

In this episode, we talk in depth about how Rick started succession planning more than a decade before he planned to transition his firm, including by identifying a potential successor, meeting with valuation consultants, and gathering the experiences of others in the advisory community, why Rick thought it was important to closely discuss the terms of the partnership agreement to ensure that he and his chosen successor were on the same page in terms of what would happen if plans went awry, and how Rick's planned successor, after several years, ultimately chose not to pursue the succession path, leaving him left to start over again.

We also talk about how Rick's second attempt at an internal succession was thwarted when a longtime employee and planned successor was headhunted away by an attractive salary offer, how Rick then worked with consultants to rank his succession preferences and widened his aperture for different types of potential partners, and how Rick ultimately decided on a deal with a local accounting firm he knew well.

And be certain to listen to the end, where Rick shares the challenges he's experienced following the deal, including managing cultural differences between his firm and the buyer, as well as his personal adjustment to no longer being in charge of the business, how Rick has found great value from maintaining a support network, including study groups, therapists, and business coaches during this challenging period, and how Rick has ultimately accepted the unexpected turns that came his way on his succession path, and doesn't have regrets about the decisions that he made along the way.

And so, with that introduction, I hope you enjoy this episode of The Financial Advisor Success Podcast with Rick Kahler.