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: