We all go through tough times. I went through a particularly sensitive point in my business journey last year. While going through it, my attorney, the advisor I leaned on the most, had a heart attack and died on a basketball court. Only in his 40s, his loss was a terrible blow not only to his family but also to me at an already very difficult transition time.
(Related: When You’re Gone, Will Your Firm Endure?)
To make matters worse, his law firm (I hired them because they said they worked as a team) appeared to be even less prepared for such a loss than I was. Not only did they not designate another attorney to fill the void, they didn’t contact me — no email, no nothing — or even return my calls. I was on my own at one of the most difficult points in my business life.
I’m telling you this tale of woe not to get your sympathy (well, OK, you can feel a little sorry for me if you must), but to bring to your attention to what I see as a major problem in the independent advisory industry.
In recent years, there has been a considerable amount of attention directed at what was a major problem: an industry-wide lack of succession planning at a time when the baby boom generation of owner-advisors was starting its retirement phase. While that oversight has been largely addressed, unfortunately, I find that today’s succession plans often fail to address an equally serious problem for clients: continuity planning.
As the name suggests, and my own sad story illustrates, continuity plans address delivering high-quality client care in the event that one of your senior or lead advisors unexpectedly becomes incapacitated or worse. I realize that most of us would prefer not to think about the possibility of these events. But I can tell you from personal experience, the consequences of failing to do so can be devastating, emotionally, mentally and financially, to the clients involved.
Yes, I realize that the services most financial advisors provide aren’t as immediately crucial as the ones I needed. But I’m sure I don’t have to remind you that most people have a lot of emotions tied up with the money that’s going to support them and their dependents far into the future. And, in my experience, many advisor/client relationships have existed for years and go beyond just the professional.
The point is that losing their financial advisor is going to be traumatic for many clients, especially ones in transition. (And the last thing you want to do is give them a reason to look for another financial advisor on their own.) So, here are the four elements that I recommend all of my clients include in their succession plans, from a not-so-good personal experience that truly hurt me: