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Practice Management > Succession Planning

Fidelity Offers Advisors Succession Planning Workshops

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Succession planning—the perennial thorn in the advisor’s side as he contemplates retirement and an exit from the business he’s often spent a lifetime building. It’s never easy, which is why more often than not it isn’t properly done. To help, Fidelity announced Tuesday that its institutional wealth services division will offer a comprehensive new program designed to move investment advisors to envision and formalize their succession plans.

The company notes that according to its 2011 Fidelity RIA Benchmarking Study, 75% of participating investment advisors either did not have succession plans for their businesses or had plans that were not ready to be implemented. More than half of investors (54%) who work with an advisor say it is important that their advisor have a succession plan. Two-thirds (66%) of RIAs would prefer to have an internal successor. Among RIAs who feel an internal successor is the best route, less than a third (29%) have selected a successor.

The program, called Realizing the Value in Your Firm, includes a series of interactive workshops being held across the country that help advisors understand their succession planning options, engage with advisors who have executed succession planning strategies and ultimately choose the succession “track” that is right for them. 

The company says it uses a sequence of personal and group exercises including a “Track Selector” game to help advisors determine which of three succession strategies is most aligned with their vision: “internal transition,” “merge and stay involved” or “sell and move on.”

The workshops are complemented by personalized consulting from Fidelity and certain third-party succession consultants, as well as a toolkit that includes worksheets, planning templates and a robust list of resources to help advisors create and implement their plans.

“The program has been long in the making; it’s designed to fulfill an acute need for advisors to plan for their succession,” David Canter, executive vice president and head of Practice Management and Consulting at Fidelity Institutional Wealth Services, told AdvisorOne. “It’s designed to help them figure out a path and, more importantly, take action.”

Fidelity’s program presents three tracks for advisors to consider:

Track 1: Internal Transition

Advisors who select this track are typically interested in handing over the reins to a junior advisor, family member or internal staff member. These advisors are confident they have the ability to select, hire and mentor someone who will share their same investment philosophy or planning approach. Retaining the firm’s brand culture and client base after the transition are important objectives.  Track 2: Merge and Stay Involved

Advisors who select this track are typically interested in finding like-minded advisors to complement each others’ strengths, leverage similar business cultures and benefit from integrated staff, tools and technologies. These advisors have a desire to continue to work after the transition, are willing to meld their investment process, and in some cases may consider revising their investment philosophy. Taking the time to find the right partner firm and dealing with the complexities involved in merging two firms are important considerations.

Track 3: Sell and Move On

Advisors who select this track are typically interested in making a complete exit from the firm and are comfortable turning the reins entirely over to someone else. There is little or no concern about retaining the firm’s name or brand, and these advisors understand that their clients may be redirected into new investment strategies and products. Realizing close to the strategic fair market value of the firm is important.

After advisors select their tracks, Fidelity provides consulting and access to tools and resources to help advisors formalize and ultimately execute their plans. This includes leveraging a detailed workbook with resources such as a talent readiness assessment, cultural compatibility checklist, partner discussion guide and keys to a written succession plan. 


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