Just as many people put off estate planning because no one wants the unpleasant task of planning for their eventual demise, many financial advisors procrastinate working on their succession plans. Whether you're the CEO of a major firm or an independent consultant with a small base of loyal clients, preparing for your ultimate exit is planning for a successful exit -- for you and your clients.
You've spent countless hours, decades perhaps, building a strong financial advisory business. You likely have loyal clients who have been with you for years, who count on you for consistent, reliable financial advice and wealth management services. When the time comes to retire, sell the business, step back due to health or personal issues, change careers, or even worse, leave this earth, you have two choices: leave the business (and your clients) in good hands or leave everything to chance.
As you can imagine, leaving the future to chance isn't satisfying to anyone involved. You'll likely lose sleep at night, worrying about the fate of the business you've worked so hard to build. Your employees may not have a job upon your exit or will face uncertainty as new, unvetted ownership takes over. And your clients. Where will they go? Who will take care of them the way you did?
Planning for success is the better option. While it would be nice to be able to schedule a meeting with an expert and complete a succession plan in a matter of hours, in most cases, that's not how it works. Succession planning is an ongoing process, one that requires forethought, strategy, and mentoring.
Keep in mind that succession planning isn't just for the president or CEO. All key roles such as CFOs, controllers, financial analysts, and finance and private equity managers, should have a plan for succession.
You know the basics of why it's important to have a succession plan -- for your sake, the company's, your clients', and your employee's. However, there are a few more reasons. Succession planning can deliver benefits long before you hand over your role to a successor.
The benefits of succession planning include:
The time to begin is now; it doesn't need to be perfect to start as succession planning is an ongoing process. Use the tips below to get started.
Succession planning is crucial to any business, of any size, and it doesn't need to be overly hard or complicated. Taking action now will ensure that your firm's future is set up for success, even if you're no longer a part of it.
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