The Great Pause: The Decision Behind Perpetuation

Like many agency principals, I have spent time over the past several years responding to a changing market. As agency and broker professionals know, in the operational years shaped by COVID, conditions changed quickly: Carrier relationships became less predictable, capacity tightened, and clients needed answers in an environment where fewer were available. 

Contemplating perpetuation

As a majority owner of a large multi-line brokerage, I began exploring what many others also were exploring: Could scale provide solutions that independence no longer could? And if so, how should our agency proceed?

That process introduced me to the private-equity–driven agency/broker acquisition market that now defines much of our industry. The conversations with players in that arena were consistent: Access would improve, stability would increase, and operational burden would shift.

The transition process itself was structured, efficient, and familiar to those facilitating it, with a logic that, on its surface, made sense. Less clear to me was how much of what made our agency valuable fit inside the acquirers’ structures.

Who we are

Our firm had been built deliberately—through people, process, and judgment developed over decades. Yet much of that differentiation did not translate cleanly into the language of the transaction. Compensation structures were viewed as inefficiencies and decision-making autonomy was treated as variability.

What we understood as strength did not always align with what the model rewarded. That disconnect was not confrontational, but it was clarifying. It forced a broader question: What, exactly, were we evaluating? A transaction or the future shape of the organization itself?

Looking around

Around the same time, I started observing more closely what was happening across the industry. Friends and peers began completing their own transactions. Many of these respected principals who had built strong independent firms remained in leadership roles after closing, often in positions intended to preserve continuity within larger organizations.

Over time, their perspective evolved, not necessarily into regret, but into recognition. Certain provisions in their agreements had not been fully understood, governance and decision rights had shifted more than anticipated, and earn-out structures influenced behavior in ways that were not obvious at signing.

Just as important was their realization that scale and sophistication, while often discussed together, were not always the same thing.

Missing pieces

As it turns out, not everyone who had been involved in building the selling firm’s value over time had been part of the conversation. Top producers, emerging leaders, and key contributors who were expected to carry the firm forward were informed and compensated, but they were not at the table.

The impact did not show up immediately. After transactions closed, integrations began and, for a period of time, continuity held. From the outside, little seemed to change.

Over time, however, patterns began to emerge—frustration, misalignment, and questions about opportunity, authority, and long-term participation. I came to think of these recurring patterns as “loss of agency”—not the sale of an agency itself, but the gradual loss of local authority, influence, and decision-making experienced by those who once helped shape its future.

This didn’t happen in every case, but it happened enough to warrant attention.

These observations are not an argument against any particular ownership model. The benefits of scale, capital access, and shared resources are real, and for many firms they are compelling. But they do point to something often underemphasized in the current environment: Ownership decisions should be evaluated through a broader lens than valuation alone.

What’s important

Financial outcomes matter, but they are not the only outcomes that do. Stewardship matters, as well; who will guide the organization and with what incentives? So does continuity; clients and carriers should experience consistency in relationships and decision-making. Culture matters; how does the firm operate, how are people developed, and what behaviors are reinforced or discouraged? As does client impact; how is advice delivered, how is risk approached, and how is advocacy maintained?

If these elements are not considered alongside valuation, the analysis is incomplete. When the analysis is incomplete, the decision—no matter how well-intentioned—carries consequences that may not be visible at closing.

Benefits and implications

This leads to a second observation: Scale and sophistication are not synonymous. Scale can bring resources, specialization, and access that may be difficult to replicate independently. But it also introduces complexity, such as layers of governance, standardized processes, and decision frameworks that may or may not align with how a firm has historically operated.

Sophistication, on the other hand, is not defined by size alone. It is reflected in how decisions are made, how talent is developed, how clients are served, and how consistently those standards are applied.

Every ownership structure—independent, private equity–backed, ESOP, or strategic partnership—creates a different set of advantages and tradeoffs. Some offer speed and access to capital, while others offer control and flexibility. Some prioritize near-term growth metrics and other structures emphasize long-term stability.

None are inherently right or wrong, but all require understanding, not just of their benefits, but of their implications over time.

That understanding becomes especially important because many of these decisions are difficult to reverse. Once governance is transferred, once equity is restructured, and once incentives are reset, the path forward narrows.

Looking inside

A third reality, often overlooked, is that agency principals have more strategic options than the current industry narrative may suggest. The volume and visibility of acquisition activity can create the impression that selling is the default outcome. Momentum builds, comparisons are made, and the question subtly shifts from “What should we do?” to “When should we do it?”

But that framing is incomplete.

Internal perpetuation remains a viable path for firms willing to invest in developing the next generation of leadership. Employee stock ownership plans offer a different model of shared ownership and alignment. Strategic partnerships can provide access to resources without full transfer of control, and private equity can be a powerful catalyst when aligned with a clear vision and understood on its own terms. Other hybrid structures continue to emerge.

The critical point is not which option is best in general, but which option is best for a specific organization, given its goals, its people, and its definition of success. That determination cannot be outsourced; it must be led.

Deliberate approach

This brings us back to what I have come to think of as the great pause—not hesitation for its own sake, but a deliberate step back to examine what is actually being decided, who is affected by it, and whether the assumptions driving the decision have been fully tested.

Perpetuation, properly understood, is not simply a transaction. It is not just valuation or timing; it is a transfer of judgment. Who will make decisions when you are no longer there? How will those decisions be made? And who has been prepared—not positioned, but prepared—to carry that responsibility?

These questions cannot be answered late in the process. They must be addressed early on, through discipline rather than urgency. This discipline takes form in clarity: clarity around equity—what it means, how it is earned, and whether it is real; clarity around opportunity—who participates, when, and under what conditions; clarity around governance—how decisions are made and how authority is distributed; and clarity around expectations—what success looks like after the transaction, not just at closing.

Clarity, trust and intentionality

Without that clarity, organizations operate on assumption, and assumption, over time, erodes trust. Where trust erodes, the agency follows.

In today’s market, this matters more than ever. When most transactions follow a similar model, selling can begin to feel less like a choice and more like a conclusion. Momentum becomes its own justification, and activity becomes validation. But it remains a choice and one of the most consequential choices an agency will make.

For some firms, selling will be the right outcome; for others, it will not. For many, the right answer will depend less on market conditions and more on internal alignment, on whether the chosen path reflects a clear understanding of what the organization is intended to become.