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January 23, 2013 at 10:59 PM
“There is no real ending. It’s just the place where you stop the story.”
Frank Herbert
Succession planning touches every part of our clients’ lives. Whether they hope to protect a business, their family or a charitable organization, our clients do not spend a lifetime building something they are proud of just to watch it fall apart in their absence.
If our client is looking to safeguard a business, this means they must find a new generation of owners or a next wave of key employees. For family protection, our clients will need our help ensuring their family members are treated equitably and are able acquire the treasured assets set aside for them. Whether this means passing cherished real estate or other family heirlooms down or just providing a generous cash donation, our goal as advisors should be to transfer these assets to our clients’ next generation free of encumbrances, like debts and taxes.
What countless advisors do not realize is that succession planning is just as important to themselves as the clients they serve. Succession plans are extremely important to financial advisors since they maximize the value of their most important asset their practices. Many consider succession planning yet fail to follow through by proactively taking steps toward setting up a continuity plan. One tool I like to employ when approaching discussions on succession planning with other advisors is the Million Dollar Round Table (MDRT) Decision Tree a tool members can run through to find the most effective way to tailor their succession planning goals to their own practice.
See also: Ready to sell your practice? Here’s how
This tool walks advisors through the steps of determining practice value, identifying a prospective buyer and executing the succession plan. Identifying a successor who is a good fit is most often the hardest aspect of putting a plan in place. This process takes more than just a handshake. According to a 2007 survey by LIMRA and Moss Adams, finding someone you trust to provide the same quality services to your clients is the most important factor in planning for a successful transition.
