Little has been said about the retirement issues financial services companies are facing as many of their own producers, many with years of business experience and countless relationships, consider retiring. The potential loss of client relationships and generational learning opportunities might be the greatest risk facing the industry as a whole today. Consider the following:
? There are approximately 78 million baby boomers, and by 2010, 64 million workers will be eligible for retirement.
? The median age for agents in the direct sales force is 48, and 55 years for those in the independent channel.
? Approximately one in four producers plans to retire or sell his or her practice in the next five years.
What Your Peers Are Reading
? About 50% of all producers surveyed do not have a successor named.
? Approximately 60% of all producers indicate that succession planning support is not provided or is worse than any other support service they receive.
Identifying the Issues
According to a LIMRA study, a large percentage of producers are within 10 from retirement eligibility, and they also carry with them at least 10 years of industry experience. Additionally, there are nearly 100,000 fewer reps today than there were 30 years ago.
Therefore, there is a huge opportunity for companies that can identify and formulate a successful producer succession planning module. The end result, as we all hope, is a smooth transition of the business that satisfies all parties involved, producers and clients alike.
Most producer succession planning models are reactive rather than proactive; that is, they are “event-driven.” For the most part, building a viable producer succession plan must include long-term support and commitment from the producer, his/her successor and firm management; and target three areas:
(1) Recruiting and retention for appropriate successors;
(2) Development and growth of successors and their businesses; and
(3) Effective transition techniques, tools and processes for both the retiring producer and his/her successor