Episode summary
Ep 501: Navigating Succession Planning That Doesn't Turn Out As Expected (Even When You're Doing ...
Financial Advisor Success (Kitces)
· · Hosts: Michael Kitces, Adam Van Deusen · Guests: Rick Kahler
Summary
Rick Kahler describes a succession journey that began as a straightforward internal transition and ended with a sale to a local accounting firm after several false starts. He spent years preparing for an internal handoff, first with Sarah Swatner, then with a later plan involving Nathan and Allison, but each path unraveled when circumstances changed. He emphasizes that succession planning has to begin years ahead because even well-designed plans can be disrupted by human decisions, recruiting offers, and unexpected business shocks.
The episode traces the practical fallout from those disruptions: Allison accepted a much higher outside offer, Rose later left, Nathan briefly considered an offer from a large firm but ultimately stayed, and the business endured pandemic-era and health-related stress along the way. Rick says those events forced him to widen his options, rank alternatives, and eventually accept an external buyer when internal succession could no longer be made to work.
He also explains that the post-sale reality has been harder than the sale itself. The buyer’s more corporate, EOS-driven structure clashes with his holacratic, purpose-driven culture, and he remains a minority partner rather than the leader he once was. His main lesson is that emotional resilience and a deep support network matter as much as legal documents or valuation work when succession does not go as planned.
Key takeaways
- Rick Kahler says the first internal successor, Sarah Swatner, decided not to buy in after the partnership and succession discussions were tested in depth.
- Rick says Allison accepted an outside offer that paid two to three times her salary, which forced him to unwind the first ownership transfer.
- Rick says Nathan stayed after considering a large-firm offer, but the firm still needed an external buyer because internal succession had already broken down.
- Rick says the final deal with a local accounting firm was a sale-and-stay structure, with him retaining 25% ownership but not control.
- Rick says the most important preparation was building emotional support—therapist, coaches, and peer groups—because black swans can derail even well-planned succession paths.
Notable quotes
“I think the most important thing is understanding the emotional resilience that I was going to need to get through this this time”
“what turned out to was quite different from that and something I've really internally had to come to resolution uh to around my legacy being passing on my firm”
“We had charts. We had here's our musthaves. Here's our hope to haves. I mean, we were doing the work”
“Allison calls and says, "You know what? I'm being headunted and they're offering me a really great salary”
How the episode opens
Welcome to the Financial Advisor Success Podcast, where you go behind the scenes with financial planner, speaker, and consultant Michael Kitsus to hear stories of how leading financial adviserss 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 Kitsus.
Welcome everyone. Welcome to the 5001st episode of the Financial Advisor Success Podcast. My guest on today's podcast is Rick Kaylor.
Rick is the founder of Kaylor Financial Group, an RAIA 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 ary 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 head-hunted 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.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- succession planning
- ria transitions
- partner discussions
- unexpected outcomes
- business sale
Companies and tickers mentioned
- Kahler Financial Group
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Financial Advisor Success (Kitces), this episode and its artwork belong to Michael Kitces. Octagon is not affiliated with the show; this page is an independent summary.
