The Independent Advisor's
Succession Plan

Why You Should Have a Succession Plan


In the years that advisorRETIRE™ has been in the field, we have seen plenty of financial advisors express interest in a succession plan. Some have moved forward with our help and allowed for us to provide them with a plan that they could feel confident in, while others felt that the more they learned about the process, the less they needed one. The unfortunate fact of watching those that choose not to work on creating a succession plan is that we know the downside and factors that go into that.

If you are on the fence about whether or not you should start on working with us to help build your succession plan, then these facts might be the determining factor that you need to really commit to planning for your future.

A Waste of Time

The last thing that you want to hear is that the work that you’ve put in for years has been a waste of time. Especially when, as a financial advisor, you had to educate yourself and build up a reliable, authentic and trustworthy reputation in order to build your book. No reputation comes easy, so it likely took a year, or ten, to finally have a book of clients that were loyal and continued to trust you with their finances. Once you’ve finally achieved this book and get to work with it for a couple of years, maybe a decade or two, you have created a relationship with clients, have a reputation in the field and are feeling confident about where you are and the future of your business, but the downside is that all of this will eventually need to be passed on when you retire.

What if we told you that 99% of independent, financial services and advisory practices will go out of business when the founder of the business retires? That means that all of the hard work you’ve put in, the knowledge that you’ve attained, the team members that you’ve trained and the clients with whom you’ve grown close too, will all have been a waste of time in regards to the contribution to financial advisory and legacy that you will leave behind. Once you’ve created these relationships and put in the time, this is the worst case scenario of what could happen to your empire at the time of retiring.

If this has you spooked, then it’s time that you learn more about the succession plan process and why it is so incredibly important to do.

Why Create a Plan

When it comes to creating a succession plan, there is one reason that every financial advisor, and any business owner in general, will agree on, and it’s the clients. As a financial advisor, you have a responsibility to your clients that says you will take care of them. This promise to care for your clients doesn’t end simply because you’ve decided it’s nearing the time of retirement. At the time that you determine that it’s time for you to retire, it means that it is now your responsibility to find a new individual that can provide the same quality of care for your clients and that they can rely on. This is where a succession plan comes in.

Once you have determined a time at which retirement will become an option, you can start preparing a succession plan for that date. These plans are often better planned and see a smoother transition when the time finally comes to pass your book of clients on to someone else. That being said, your succession planning process will take quite a bit of time, especially if you’ve already invested quite a bit into the clients that you have.

During the succession planning process, we will review the size of your client book, the essence, and reputation of your business, what types of services you offer, what specialty and additional services you offer and a review of your clients and their expectations. Our job is to find someone that can excel, or at least match, the quality that you’ve provided for years so that your clients can remain confident in the services that they’re receiving and so that you can leave them in hands that you feel can maintain their expectations. After all, these are no longer just people to you; they are relationships that have been built that you don’t want to be ruined because of this next phase in your life.

Again, this process is time-consuming and by no means an easy one, but it is one that will leave you feeling relieved when you retire rather than guilty about the state that you left your clients in or upset about the way that your reputation winds up. Ultimately, this is simply the best way to make all of the work that you’ve done finish on a great note.

As a group of individuals who were once financial advisors, we know that the succession process is a necessary one, and we know where the priority lies. Our job is to ensure that you have a reliable plan that leaves your clients in good, trustworthy hands and that you can end your career on a positive note. These two factors require strong communication, time and a dedication to the planning process. If you are ready to start this planning process, then it is time that you reach out to advisorRETIRE™ and schedule out time for one of our team members.

Subscribe to receive our best succession planning content first.