The Succession Challenge: First Things First, Begin with the End in Mind

 In Professional Development

Starting to build a succession plan by having the end goal in mind is sound advice, but what we learned, based on a recent survey conducted in partnership with the Financial Planning Association, is that 73% of advisors are not doing it. Knowledge LabsTM director Michael Futterman discusses how to strategically kick-start a succession plan that lets you achieve the legacy that is right for you and your practice.

Key Takeaways

  • Your succession plan is most effective when it addresses your needs and goals. So that’s where we most often begin – by asking what do you want for yourself?
  • Begin by taking time to reflect: you can reach a set of ideals and ideas on what you want so your plan can take shape
  • Having clarity on the end goal typically creates positive inertia and helps put more structure and build steps around crafting a formally documented plan

What’s the first thing to consider before building a plan? Begin with the end in mind. It’s sound advice, but when it comes to doing that for their businesses, advisors don’t heed it. In 2015, only 28% of advisors had a formal succession plan, and fast-forward three years, that figure has barely budged. In my experience with Knowledge LabsTM and by researching the industry and coaching thousands of advisors for the greater part of two decades, I understand why they’d falter at this stage: most have deep financial and emotional ties to their practices. Looking to beyond the day when they acquire their last client is hard to do, but once we establish the desire to retire one day, the questions I’m asked often start with “What’s first?”

And as you might guess, where to get started or what’s top of mind isn’t the same for everyone. Some might be focused on the financial machinery that’s going to supply them with revenue once they retire; others are concerned with how they are going to spend their time now that they aren’t tied to an office. But, like the advice you provide to your clients, your succession plan is effective when it addresses your needs and desires. So that’s where we most often begin – by asking what do you want for yourself?

I was recently working with an advisor who was dreading retirement – he didn’t know how he’d spend his time. He didn’t necessarily want to be home more and he wasn’t in good enough health to fill his days with golf or travel. As an advisor, you want to consider all aspects of this next stage, from where you want to live to what you want to do and not do. Also consider multiple scenarios – while we all plan to be in good health, we all know that life has plot twists that are difficult to see coming. By taking time to reflect and come to a set of ideals and ideas on what you want, your plan can come to take shape.

I find that having clarity on this first aspect creates positive inertia for my clients, helping them to put more structure and steps around building a formally documented plan. Whether you are part of a team or looking to pass your book onto another advisor, knowing what you want sets the agenda and provides a foundation for finding the right partners to help you fulfill your plan and transition out of the business.

Learn how to strategically position your practice’s legacy with our Succession Planning resources.

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