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Life Health > Running Your Business

Put Strategic Context Around Your Succession Plan

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If you’re a principal of an RIA firm, few events will affect your business more than your exit from the company.  Few decisions will affect your personal life more than retirement. Given that succession planning is the intersection point of these two macro life areas, it is startling how few advisors invest sufficient time and energy in this activity. Taking time to create a comprehensive succession plan can not only ensure a clear path to retirement for you, it also has the potential to create greater success in business and life.  

So where do you start? When drafting a succession plan, you should try to step back from the plan and think more broadly about the overall strategic context for the decision. The time is right to decide what you want to achieve in business and in life, so clear some time, do some soul searching, and answer these questions with a big-picture perspective:

  • Business Goals: What are your mid-term business goals?  What do you want to achieve with your business during the next five years?

    Keep it short and sweet. Boil down your long list of business initiatives to the  top 2-4 goals to be accomplished during the next half decade. Is it growth? Optimizing profits? Attaining a new client service model? Adding new services, expertise or a new geographic location? 

    Determining this shortlist of mid-term goals will help you create a more strategic transaction through your succession plan. You could merge with an organization that has desirable services, expertise or office locations.   

    Alternatelly, you could limit your successor search to external candidates  with specific expertise. With clearly defined business goals top of mind, you can seek outsuccession solutions that solve broader issues.

  • Personal Goals: What are your long-term personal goals? What do you want to achieve with the rest of your life?  What is the legacy that you would like to leave behind?

    Determining these broad personal life goals gives you a compass for the succession planning exercise and helps you find the connection between  these aspirations and your transition plan.

    Try to imagine your life after retirement. Will you be happy spending most of your time golfing, as you may have imagined? Or will you miss engaging with clients or making investment decisions? You are the ‘wealth management  expert’ in your own social network: will your ‘identity’ be diminished if you are technically no longer a wealth manager?

    Taking a hard look at your identity—both now and in the future—is a valuable exercise as you prepare      for retirement.  It’s important to gain a clear understanding of what fulfills you, because it affects the timeline and process you put in place for your       future succession.

A shortlist of business and personal goals will give you the right strategic context for your succession plan.  They will drive the selection of strategic options you pursue and affect core decisions throughout the process.  Ultimately, the investment you make in thinking strategically about yourself and your business will help create a far better succession plan.


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