What Is a Certified Exit Planning Advisor (CEPA)?

Whether an intention from the beginning or arising as a retirement solution, many business owners aspire to sell their company. However, because mergers and acquisitions can be complex and often involve significant sums of money, especially hinging on the scale and a business’s overall value, it’s a good idea to work alongside an experienced financial advisor. One type of professional with this skillset is someone with the Certified Exit Planning Advisor (CEPA) title.

In this article, we’ll highlight the role of a CEPA and how they help business owners plan exits. In addition, we’ll shed some light on the steps an individual must complete to earn the title and how you can find one.

CEPA Definition

The Certified Exit Planning Advisor (CEPA) title is a professional credential offered by the Exit Planning Institute (EPI). Titleholders have experience helping business owners work through and map out the complex strategy of selling their company or merging it with another. To earn the title, individuals must complete a five-day program, where they learn and practice skills such as:

• Comprehensive financial planning for businesses and their owners
• Valuations
• Insights surrounding exits
• Building succession plans

If you’re a business owner considering the next steps for an exit or transition, CEPA professionals have the exact skillset to help you map it out. Experts with the title may work at wealth management or financial planning firms and hold other reputable titles, such as Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA), with the CEPA designation signifying their proficiency in business ownership needs.

Becoming a CEPA

While the educational program for the CEPA title only lasts for five days, acquiring the title requires individuals to put in significant effort studying for the exam and collecting the necessary outside professional and academic experience to qualify. Before enrolling, one must complete these prerequisites:

• Five or more years of full-time employment as a financial advisor, owning a business, or working in an adjacent qualifying field.
• Hold a bachelor’s degree from an accredited institution or university (if not, EPI allows applicants to send other sufficient professional experience).
• Maintain a membership with the EPI.

Once a candidate completes the above, they can be eligible to enter the CEPA program and earn the credential. The tuition cost to register is $3,300, which includes the study program, exam fee, and other learning materials.

Here is what the program entails:

Education and Exam

The first component of earning the designation is completing the education requirement. This involves a five-day program, where students must go through what the institute calls a “three-layered” process for each day. According to the brochure for the program, the first part includes watching educational videos on the day’s topics, the second part is for self-study, and the final piece of every day is meeting remotely with instructors, allowing students to ask questions or learn more.

Overall, the course gives advisors a balanced understanding of exit planning as a practice, including an overview of holistic financial planning, valuing a business, creating and putting plans into action, and both internal and external exit options. The program also allows students to learn about the EPI’s Value Acceleration Methodology™, which gives titleholders a “strategic framework” for planning and accomplishing a successful exit for a client.

After finishing the learning portion, students must take and pass a closed-book exam with at least 70% to demonstrate their knowledge. The test includes 150 questions and takes place online under the supervision of a proctor.

Who Should Hire a CEPA Professional?

CEPAs have varied and extensive expertise in working with business owners and around various types of transitions. Therefore, if you’re an owner of a small business or a mid- to large-size one and want to begin planning an exit, you should consider hiring someone with the designation.

The skillset CEPAs carry also makes them efficient resources for financial advice on general business operations. While planning exits is one, albeit large, part of their wheelhouse, they also have experience with financial planning for business owners. So, you could work with one to create a plan to scale your company, for instance, with an eventual exit or transition as the bookend.

CEPA professionals also have intersectional expertise with estate planning. That is, they could help you draw up plans for succession or transitions for one or more businesses you own upon your passing, whether it’s leaving it to a trusted family member or employee, placing it in a trust, or liquidation.

How to Find a CEPA

Since their expertise is wide-ranging and professional experience is a prerequisite to the program, CEPA professionals may hold other titles and serve a diverse set of clients. While some may manage their own firms geared toward business owners, others may work at larger wealth management or planning companies that offer those services.

Are you considering hiring an exit planning advisor to help you with your business? Here are some different and viable ways to locate one:

• The National Association of Personal Financial Advisors (NAPFA). This lets you narrow your search for professionals with the designation by ZIP code.
• Matching services. Online matching tools, such as this free one, are an easy way to quickly find a professional that fits your needs near you, including those with the CEPA title.
• FINRA BrokerCheck. This is an official search tool that lets you find and research advisors with the CEPA credential by name or firm.
• Investment Adviser Public Disclosure (IAPD). Available from the SEC, this is another tool that lets you find professionals by name. It also gives you information on business practices and disciplinary actions so you can make a good choice.
• Word of mouth. You could always try asking other business owners you know about which advisory firm or expert they work with. Someone in your network or community may already have a CEPA they could refer.

Frequently Asked Questions

Is a CEPA a fiduciary?

CEPA designees must strictly adhere to the EPI’s code of ethics and professional standards. As part of it, they must maintain a standard of integrity and objectivity while working with clients, including avoiding conflicts of interest and emphasizing their clients’ best interests. In this way, they uphold standards of professionalism and truthfulness, much like the fiduciary duty that high-quality advisors practice.

What is the cost of hiring a CEPA?

Like other types of financial advisors, the cost to hire a CEPA professional to help your business can vary. Ultimately, it will depend on both the advisor’s preferred fee structure and the nature of your relationship. For example, if you’re looking for a one-off consultation to write up transition documents or come up with a valuation, the expert might charge a flat cost. On the other hand, you might face a retainer or recurring payment schedule if you’re looking for a more ongoing relationship.

To learn more about a financial advisor’s fees, it’s smart to ask them upfront and check Part 2A of their Form ADV document. Available through the SEC’s IAPD website and often on a firm’s website, the latter will give you a detailed insight into their services and the fees that match up with them.

Why should a small business owner hire an exit planning professional?

If you own and run a small business, you likely have a lot on your plate. While managing day-to-day duties, you’ll face the task of managing employees, cash flow, and planning the future. Bringing in a certified exit planning advisor (CEPA) professional can help you understand the short- and long-term financial objectives for your business, potential exit options, and devise a fair valuation. This way, when a merger, acquisition, or ownership transition becomes a near reality, you’ll be prepared and informed.