Live Oak’s James Hughes on Breakaway Transitions, M&A and Succession

Whether you’re a prospective breakaway advisor looking for liquidity to de-risk a leap to independence or pay off a note balance, or a business owner seeking funds for acquisitions or succession planning, you have an important decision to make around accessing capital.

Because as the wealth management industry landscape evolved, advisors became the beneficiaries of several paths to consider.

Over the course of this series, we have discussed “selling” a portion of the business (that is, equity) to any one of the many minority investors or private equity firms in the space, as well as independent broker/dealers and supported versions of independence that offer forgivable loans to help fund a transition.

But what about direct financing options?

James Hughes, the SVP and head of investment advisory lending at Live Oak Bank, joins the show to discuss taking on debt to fund your business’s next phase of success.

As the No. 1 SBA (Small Business Administration) lender in the country, the bank started lending to advisory practices back when James joined in 2013—at a time when there were few other options available in the space.

In this episode, James speaks with Louis Diamond about the many reasons advisors opt to work with a bank, including:

  • Taking on debt vs. selling equity—and what factors a current or prospective business needs to consider when selecting its financing path;
  • The unique position that Live Oak holds in the industry—and why large institutions and local banks are less inclined to finance an independent wealth management practice;
  • Understanding the differences between different use cases—and what you need to know about accessing capital for succession, acquisition, growth or financing a leap to independence;
  • Succession planning—and how Live Oak offers an alternative to business owners and next gens alike;
  • Access to capital for breakaways—and how an advisor might benefit by funding a transition with debt vs. equity;
  • And much more.

Taking on debt vs. selling equity is a business decision not to be taken lightly, making this episode an important one for both prospective and current business owners alike.

Download a transcript of this episode …

Listen to more episodes of Mindy Diamond on Independence: A Podcast for Financial Advisors Considering Change

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