If you’re like three-quarters of the investment advisors in the 2011 Fidelity RIA Benchmarking Study, you don’t have a succession plan for your business, or you have one, but it’s not ready to be implemented.
Ask yourself: How would you feel if 75% of your clients did not have wills and estate plans for their families?
You wouldn’t let it happen to your clients, so don’t let it happen to you.
A succession plan is like a will for your business, so why wouldn’t you protect the asset that you’ve built and the families that you serve through a thoughtful succession plan?
Something is holding you back.
I’ve heard a lot of different theories from speaking with advisors across the country, such as “I’m not going to retire,” “I can’t figure out the financial payout,” “I’m too busy with clients,” and the more far-fetched, “I’m not going to die any time soon.”
These may all be factors, but often what underlies them is one core concern: “I don’t know what I want.”
Succession planning is often seen as analogous with the “end state” or technical phases of selling, which involve determining the appropriate valuation and creating timelines.
Too many advisors are focused on the how and when of succession planning, but they should really start at the why: the reasons and personal motivations behind their strategy. Understanding this first not only helps ensure more successful implementation of a plan, but it also can drive more value to your business, based on what’s most important to you.
This is the same approach you would apply to retirement planning. You’re likely not starting client conversations with how much money they need in retirement. Rather, you’re starting with the personal motivations behind retirement.
To get at the what and the why of succession planning, we’ve identified three core tracks for consideration. To help clients envision their future, post-transition state, we guide them through a creative imagining exercise. We’ve also developed a series of exercises and simple self-assessment tools advisors can use to identify the track that’s best for them.
Track 1 | Internal Transition