Grooming G2: Financial Firm's Succession Plan a Foundational Priority



Pictured, from left to right, Thomas J. Guidi, CFA – Investment Manager, Shareholder; Rachel A. Rasmussen, MBA, CFA – Investment Manager, Shareholder; Joseph A. Patterson, CFP® – Financial Planner, Shareholder; W. Mark Motley, MBA, CFA – Investment Manager, Shareholder; David A. Foster, CFP® – Financial Planner, Shareholder; J. Ryan English, MBA, CFA, CPA, CFP® – Investment Manager, Shareholder; Anthony R. Luckhardt, MBA, CFP®, CRPC® – Financial Planner, Shareholder;Zachary T. Horn, MBA, CFP®, CMFC – Investment Manager, Shareholder.

Photo by Jon Keeling

 

When Dave Foster and Mark Motley teamed up just over two decades ago to create the independent, employee-owned financial planning and investment management firm Foster & Motley, it was not unlike that classic Reese’s Peanut Butter Cup commercial where two people walking down a street – one eating peanut butter and one eating chocolate – collide. One person exclaims, “You got your chocolate in my peanut butter!” and the other person exclaims, “You got your peanut butter in my chocolate!” But after sampling the combination, the two people extol the new mixture’s scrumptious taste, resulting in the ever-popular candy bar’s ensuing slogan, Two Great Tastes That Taste Great Together.

Likewise, back in the day, Foster, CPA, CFP®, did financial planning but not investment management, and Motley, MBA, CFA, did investment management but not financial planning. In 1996, after frequently referring clients back and forth between their respective businesses, it struck them that their mutual clients would benefit from a combined approach to wealth management. They joined forces, founded Foster & Motley, and the rest is a successful history – and a solid future – both built on “The Power of &,” the fee-only firm’s signature slogan.

“It took a little time for us to get together, but the universe was spelling it out,” recalls Foster, who officially retired earlier this year. “To this day, that’s still Foster & Motley’s strategic advantage – real financial planning and real investment management. When you put them together, you get twice the wealth management power. Not many firms do that. We do both, and we do both well.”

A key driver in the firm’s steadfast ability to help each of their clients stay his or her financial course is Foster & Motley’s broad, 13-shareholder-strong ownership. That breadth of ownership is at the heart of the firm’s succession plan, ensuring a smooth transition between first-and second-generation advisors. Clients know that as the older shareholders retire, the business won’t be pulled out from under them and sold to a bank or another investment company.

“From the start, we knew we didn’t want to one day sell the business to some other firm,” Motley says. “And as we started to grow and get new clients, we just knew we needed to hire good people who wanted to share ownership, who wanted to be owners. So, that’s what we did. Our clients know that our succession plan is in place, and they know who they will be dealing with.”

Of course, grooming G2 advisors is not something that can be left to the last minute.

“I was cleaning out my office in late December, and I found an old folder with an Excel spreadsheet inside from 1996, and it outlined what would happen if we were to have second-, third- and fourth-generation shareholders,” Foster recalls. It was just a simple spreadsheet, but establishing a solid succession plan was a foundational priority he and Motley shared from the beginning.

Happy Trails

Since retiring, Foster has traded shouldering his clients’ financial futures for honing his beekeeping hobby, hiking the Appalachian Trail, and working on his property in Kentucky. But before he left, he made sure he was leaving his clients – some with him since the beginning – in capable Foster & Motley next-generation hands.

“I feel totally comfortable with everyone I’ve transitioned my clients to. That feels really good, and it makes it much easier to step away,” Foster says. “When I think about how solid our employees and shareholders have been – that’s probably been one of the most amazing things. We’ve got a great crew of people.”

 

Foster & Motley is located at 7755 Montgomery Road, Suite 100, Cincinnati, OH 45236. For more information, call 513.561.6640, 800.532.2962 or visit www.fosterandmotley.com.