The Succession Paradox: Why Most Firms Fail Where HB Wealth Succeeded
Succession planning in the wealth management industry is a bit like a high-stakes game of chess—except most players don’t realize the board is on fire. According to Charles Schwab’s latest survey, only 45% of small firms and 65% of larger ones have a written succession plan. That’s not just surprising; it’s alarming. What makes this particularly fascinating is that succession isn’t just about replacing a leader—it’s about preserving a legacy, a culture, and a client base. Yet, so many firms treat it as an afterthought.
HB Wealth, however, is the exception that proves the rule. Their 12-year succession plan isn’t just a blueprint; it’s a masterclass in foresight. Personally, I think what sets them apart is their willingness to treat succession as a long-term relationship, not a transactional handoff. Andy Berg, the co-founder, didn’t just find a successor; he groomed one. He spent four years working alongside Thomas Carroll, ensuring the firm’s DNA was preserved. This raises a deeper question: Why don’t more firms approach succession this way?
The Equity Myth: Why Sharing Ownership Isn’t Just Generosity
One thing that immediately stands out is HB Wealth’s commitment to equity-sharing. It’s not just a perk; it’s a philosophy. What many people don’t realize is that equity isn’t just about financial reward—it’s about alignment. When advisors own a piece of the firm, they think like owners, not employees. This isn’t just a retention strategy; it’s a cultural cornerstone.
But here’s the kicker: equity-sharing is hard. It requires careful planning, transparency, and a willingness to dilute control. HB Wealth managed this by bringing in minority investors like TPG Growth and New Mountain Capital. What this really suggests is that you can maintain autonomy while accessing capital—if you’re strategic about it. Most firms either cling to control or sell out entirely. HB Wealth found a middle ground, and it’s paid off.
The Integration vs. Aggregation Debate: Why ‘One HB’ Matters
In my opinion, HB Wealth’s insistence on integration over aggregation is one of its most underrated strengths. When they acquire a firm, they don’t just add assets; they integrate systems, cultures, and values. This isn’t just about efficiency—it’s about consistency. Clients don’t want to feel like they’re part of a conglomerate; they want a unified experience.
What’s interesting is how this approach narrows their pool of potential acquisitions. Not every firm wants to give up its independence or adopt a fee-only model. But for HB Wealth, that’s the point. If you take a step back and think about it, this is less about growth for growth’s sake and more about building something sustainable. It’s a long-term play in an industry obsessed with short-term gains.
The Future of Wealth Management: Why Culture Eats Strategy for Breakfast
A detail that I find especially interesting is HB Wealth’s focus on client retention. They aim for 98.5% annually—and often exceed it. This isn’t just a metric; it’s a mindset. In an industry where firms are constantly chasing new clients, HB Wealth is doubling down on the ones they already have.
This raises a broader question: What if the future of wealth management isn’t about scale, but about depth? What if the firms that thrive are the ones that prioritize relationships over transactions? HB Wealth’s success suggests that culture—not just strategy—is the real differentiator.
Final Thoughts: The HB Wealth Blueprint
If there’s one takeaway from HB Wealth’s story, it’s this: succession planning, equity-sharing, and cultural integration aren’t just nice-to-haves—they’re necessities. What makes HB Wealth’s approach so compelling is its holistic nature. They didn’t just solve one problem; they built a system that addresses multiple challenges simultaneously.
From my perspective, the real lesson here isn’t about what they did, but how they thought. They approached every decision with an eye toward the long term, even when it meant sacrificing short-term gains. That’s rare in any industry, let alone wealth management.
So, the next time you hear about a firm struggling with succession or culture, remember HB Wealth. They didn’t just survive—they thrived. And in an industry where disruption is the norm, that’s not just impressive; it’s inspiring.
