Wealth advisors tend not to be the best managers of their own firms; finding the experts to tend that side helps build a resilient business in the long run. When succession planning is in mind, that’s important, a newly-appointed figure at an RIA says.
CG Financial Services, an RIA with more than $4 billion in AuM, appointed Scott Hiipakka as president and chief operating officer a few days ago.
When this publication spoke to Hiipakka about his move, the way that wealth managers handle business transition and succession came up. In many cases, aggregators or M&A deals dominate the news.
But there are other ways forward, he says.
With succession, there needs to be a mix of founders/non-founders and advisors in a leadership team, he said.
Firms must create new generations of shareholders in the business. This is about “seeding G2 and G3 shareholders,” Hiipakka said. “Shareholders must not just be the advisors but those running the business.”
The range of ways businessmen and women can handle succession/corporate transition is a hot topic as the Baby Boom generation passes on, and older GenXers do the same. Within wealth management, where the average age of advisors is in the high 50s , this shift is a big focus. The sector has seen a great deal of aggregation and the creation of large firms seeking economies of scale.
Hiipakka relishes the challenges of his new role. Prior to this, he was CEO of the Michigan Israel Business Accelerator, a non-profit economic development organization. Hiipakka, who has extensive leadership experience, is also a major general in the Michigan Army National Guard, where he oversees several mission operations.
Established in 1998, CG Financial Services encompasses two divisions: CG Advisory Services, an in-house RIA, and CG Advisor Network, a platform designed to support Form 1099 advisors transitioning from wirehouses and independent broker-dealers.
“What attracted me to the firm was its values: they put the client first…CG meets our clients where they work and live,” Hiipakka said.
Asked about his military experience and previous work, Hiipakka said he came to the new job with a passion for solving problems.
“Retention rates at CG are high,” he said, with people working at the firm for five, 10, 15 years or more.”