When you’re ready to retire from the advisory firm you’ve spent your life building, you usually have a few options. You can sell to a larger organization, or you can try to find a successor to continue your firm’s independence.
Replacing the owner or CEO of a firm can go very well with the right preparation, or it can go poorly with the wrong approach. Succession can look different for every firm, but there are some commonalities every advisor should consider before they decide to take on an heir to the business they created and built.
Options for a Successor
Choosing an heir to a business is a crucial decision. If you choose well and the hand-over can be smooth, but choose poorly and your entire retirement plan can be derailed.
When it comes to finding a successor, advisors have two options: Look for someone like yourself, or find someone with a different skill set.
If you’re a builder, it may be hard to find another young advisor who’s also a builder and entrepreneur at heart. It’s likely they are already building their own firm. In other words, choosing someone very similar to you in skills and personality may lead to clashes you’ll have to learn to overcome, and getting along with your successor is often an overlooked part of many advisors’ succession plans.
The alternative is to find a successor with a different skill set. A successor with the skills to maintain and enhance your firm are going to be very different from the skills you already have. Instead of finding someone to build, we often recommend the easier route; find someone who can help scale, enhance, and increase efficiency in your firm.
But, like anything in life, the relationship-building and perspective it takes to find someone different than you takes the greatest amount of effort.