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Practice Management > Succession Planning

8 Steps to a Successful Succession Plan: United Planners

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United Planners Financial Services is taking a giant leap forward in succession planning—literally.

The one-year anniversary of its Legacy, Exit and Acquisition Planning Strategies (LEAPS) initiative is rapidly approaching, although it’s informally existed for far longer, says Sheila Cuffari-Agasi.

“About four years ago I heard from an advisor in a remote area in the South,” Cuffari-Agasi, vice president of partner development for the Scottsdale, Ariz.-based firm, explains. “He said he loved everything we do, but he was looking to move to another firm for succession planning purposes because that firm had other reps in the area and we did not.”

She took it as a wake-up call to put a formal package in place to ensure United Planners didn’t “bleed advisors” to larger firms.

“It’s geared towards the seller,” she adds. “It focused on finding their ideal candidate, if they don’t have one already.”

If the firm is able to match one United Planners’ rep with another, there is no cost. Beyond that, the program consists of a silver, gold and platinum level, as well as a la carte, and varies by how many drip campaigns are needed, how much coaching is needed, whether a succession plan is drafted, among other items. It’s backed by Succession Resource Group, which United Planners retains to perform valuations, business continuity plans and succession plans.

“Too many advisors still run their firms as a practice, rather than a business,” Cuffari-Agasi notes. She offers the following tips for advisor to consider when beginning the succession planning process.

1) Decide whether you’re looking for a long-term succession plan, a short-term continuity plan (defined as death/disability plan) or both.

2) Determine priorities. Decide what factors are important to you, including standards for your successor, your level of ongoing involvement in the transition, probability of client satisfaction and financial compensation.

3) Identify your successor. Partner development can help with this step, which can be the most complex in the process, she notes.

4) Talk to industry veterans about the potential successor; talk with a few of the potential successor’s clients. Conduct a quality control survey, or something similar on behalf of the practice. Identify areas of improvement where the successor may complement your practice. 5) Totally negotiate the terms of the succession and sign a final agreement before introducing it to your clients; then make the introduction formal. Include means by which either party can terminate the agreement under stipulated circumstances with suitable penalties. Ensure the payment, if there is one, is certain — preferably held in escrow at a trusted third party (lawyer). If there is an earn-out or a series of payments, include provisions in your agreement for what happens in the event of a failure to make payments or death of receiver.

6) Meet jointly with your successor and all of your clients to ensure a smooth transition on the client’s behalf. Brainstorm questions clients may ask so that there is no confusion or doubt.

7) Accept the fact that when the transition is fully completed you can and should separate yourself from the practice (unless the terms of the succession state otherwise). If a person buys your practice, that person is entitled to conduct business in his or her way without interference from you. You will probably not have access to client records after that point. If your successor is a family member, devise a plan for how to resolve disagreements, perhaps using a friend or outside advisor as a mediator. Make sure you have a plan for how you are going to spend your newly found time (i.e. hobbies, travel).

8) Publicize your intentions to your clients. 

Check out Getting Your Succession Planning Back on Track by Angie Herbers on ThinkAdvisor.


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