From the July 2010 issue of Investment Advisor • Subscribe!

Olivia's Advice on Succession Planning

Sidebar to the feature "Pass It Forward"

Many financial advisors resist developing a succession plan because of our individual (and societal) reluctance to deal with death and disability. It's easier to say you'll deal with these issues "later" than to confront them head-on. But making decisions about the future will create greater serenity and security for yourself, your family, your employees, and your clients.

You may need a network of support to coach you on how to tackle these issues. As a business coaching professional with expertise in this area, I would offer these tips:

1. Take time to clarify where you want to go with your business, and sort out which of the options makes send for you. Communicate your plans as early as possible to your staff. Get together with each employee to explore what they want to achieve at the firm, so you can see how they might successfully weather this transition.

2. Validate and appreciate your staff in word and deed, and help them find a role that uses their skills and talents well.

3. If it's feasible, consider "trying on" a succession plan during a transitional period when the process can be tweaked. For example, you might give a promising insider an opportunity to run things while you take a long vacation.

4. Schedule regular retreats with an outside facilitator to help you and your staff navigate rough spots in the transition. It's useful to hold these at a neutral location.

5. If you're bringing in people from the outside, know in advance that this kind of change is always difficult, and needs to be handled with care and sensitivity with existing staff.

6. If you're hoping to sell your firm to an employee, don't wait until the last minute. It may take time to decide on a fair price, and quite a bit more time for your buyer(s) to come up with the money.

7. Hold regular staff meetings through the process, as well as periodic one-on-one check-ins, to see how everyone's doing with the transition and its inherent changes.

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