As you may have heard, since I wrote my February 18 blog, What Advisor-Owners Can Learn From Peyton Manning, the 2016 Super Bowl-winning quarterback Manning announced his retirement from football. That development provides advisory firm owners with yet another valuable lesson: Don’t stay too long.
Put another way: when it’s time to retire, retire. I realize it’s just as hard of a decision for a business owner as it is for a star NFL quarterback. That’s because in both cases, people tend to love what they do. Yet, perhaps surprisingly, that makes the decision a bit easier for advisors as well as athletes: It’s time to quit when you don’t love what you do anymore.
Yes, I know that advisors (and football players) usually come up with a laundry list of other considerations to “help” them decide if it’s time to go. Here are just a few:
- Am I still good at my job?
- Can I still add value and/or be a positive influence?
- Do my clients and/or employees still need me?
- What would I do if I didn’t work? Can I afford to retire?
In our experience, each of these issues and most others really boil down to the same basic question: Do I still love to come to work? Because if you’re not loving it, chances are you’re not as good, don’t add as much value, aren’t really a positive influence, and probably aren’t meeting many of anyone’s needs—including your own.
As for the question about finances, at least with our clients, it’s not usually a question of will you have ‘enough’ income but rather a question of “more.” The question that owners need to ask themselves is whether “more” is really worth making yourself do something that just isn’t that much fun anymore.
This is a particularly hard decision for advisory firm owners. Virtually all of the owners I know started their firms (or joined a firm) because it was their “dream job” that offered them control, freedom, flexibility, clients, etc.
The good news is that advisors are usually faced with this decision in their 60s or 70s, rather than in their 30s, as are professional football players. The even better news is that, unlike professional athletes, retirement for a firm owner (or partner, or senior advisor) doesn’t have to be all or nothing. (Yes, sometimes football players do become coaches, but it’s rare. For instance, Manning’s coach Gary Kubiak played nine seasons for the Denver Broncos as backup quarterback to Hall of Famer John Elway.)
The ‘Retirement’ Options for Owner-Advisors
For owner-advisors, there are a lot more options. At the top of the list is cutting back rather than full retirement. Many firm owners realize that they still love some parts of their jobs, just not all of them. So they work out a “part-time” retirement with their partners. Often advisors find that “rainmaking” fits in nicely with a semi-retired lifestyle: playing golf and attending social events. And they find that the contacts they make are quite a bit more affluent than those they made when they were launching their firm.
Other owners find that they like mentoring younger advisors into lead advisors and partners. Although an essential part of growing a firm, advisors who are working full time often find it difficult to devote much time to younger advisors. A part-time owner can make a major contribution to the growth of the firm—also often working with a handful of their long-time clients.
And older advisors often get involved with professional and industry groups–writing, speaking, and even teaching at local professional schools. Not only are these ways of advancing the profession of financial advice, they can also raise the stature of the firm, which can help with both recruiting advisors and attracting new clients.
We find that these “semi-retired” situations are very attractive to many older firm owners these days. They can stay involved with their firm, and profession, and still have more time to spend with their spouse, family and friends.
The key to making this work successfully is to get 100% buy-in to your plan from the other firm partners who are still working full-time. And you need the ability to “step back” gracefully, getting out of the way and letting them run the business.
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