• Products
  • Insights
  • Practice Management
  • Resources
  • About Us

Source: Survey Reveals Details About Financial Advisor Succession Planning, Yahoo Finance, 3/9/22.

As I talk with financial professionals around the country, many of them share a similar story:

“I sense that retirement is imminent for my team’s leader, but we don’t talk about it. I only know that I’ll be taking over the role—we have no formal transition plan in place. I imagine it’s not easy to let go. He built this practice from the ground up and has put his heart and soul into it. Our clients are like family to us.

Still, we need to get prepared for the change to make it as smooth as possible. Not just for us, but for our clients too. How do I have a conversation without coming across as ungrateful or pushy?”

This article gives you, the future team leader, a step-by-step guide to start your team’s succession plan. Whether you realize it or not (and my guess is that you think about it every single day!), your future team needs you to create this plan.

  1. Have the Conversation
    If it’s understood that you’ll be the future team leader, it’s critical that you meet with the retiring leader to talk about a timeline and vision for the future of the practice. Your goal at this meeting is to set the stage for the benefit of the retiring leader as well as the future team. Here are tips to encourage a productive conversation:

    Acknowledge his or her leadership

    • Take a walk down “memory lane,” e.g., reminisce about how he started the business, memorable stories, and anecdotes of what he or she has learned
    • Hear their story. Talk less, listen more.
    • Thank them for their mentorship and trusting you (for the opportunity) to continue what they started

    Share your vision

    • Talk about industry shifts and how you envision the practice addressing them going forward
    • What do you envision doing more of? Less of? Stop doing altogether?
    • For example, highlight your passion around positioning the practice to deliver solutions to clients beyond portfolios, by incorporating holistic financial planning or helping them solve their evolving needs of longevity

    Ask for feedback

    • Listen and ask plenty of follow-up questions
    • Don’t react immediately, especially if you disagree. Rather, thank them for sharing their thoughts.
    • Take notes, and be open to adjusting your vision based on their feedback

    Discuss the timeline for the leader’s retirement

    • Agree on a specific retirement date
    • Use a calendar to visually see the flow of events and amount of time allocated, such as:
    • Final retirement date
    • Date of the announcement to the team
    • Date of the announcement to clients
    • Retirement celebration
    • Modified schedule of retiring leader (i.e. reduced 3-day work week)
    • Have a “flexible but firm” mindset when finalizing the timeline

    Once you’ve established a timeline, use your firm’s resources to complete any formal contracts, paperwork, etc. that are necessary to move forward. Ideally, try to find someone who’s gone through a succession transition and tap into their experience. Ask if it’s OK to use them as a sounding board. If possible, don’t go through this transition alone.

Source: Survey Reveals Details About Financial Advisor Succession Planning, Yahoo Finance, 3/9/22.

  1. Think Before You Replace

    It’s natural to think you’ll hire a replacement for your retiring leader immediately. And that may be a good strategy—or it may not be. These are things to factor into your job description/candidate search, as opposed to simply filling an empty role:

    What will you lose when the retiring leader departs?

    While this may seem obvious, reflect on the questions below to make sure you’re not missing anything.

    • What role has the retiring leader played on your team most recently?
    • What specialties has the retiring leader brought to the practice? (e.g., insurance, long-term care expertise, alternative investments, financial planning, etc.)
    • Does the retiring leader excel at prospecting and gathering assets? If they have, are you going to take on the ‘rainmaker’ role?
    • What unique knowledge does the retiring leader have (family or personal experience, professional paths, other designations, etc., that the team will lose)?

    Going forward, what diversity in gender, generations, skills, and experiences would benefit your team?

    Review the list below. Which of the items below do you already have on your team and what capabilities do you need?

    • Professional Skills: This is education, formal credentials, training, etc. that builds the credibility of your team
    • Credentials (CFP, CIMA, etc.)
    • Technology acumen
    • Marketing
    • Expertise in challenges of longevity
    • Life experiences: These are non-professional aspects that could help your team connect more deeply with existing clients, or attract new ones
    • Caregiving expertise
    • Nonprofit sector knowledge
    • Major-disease management (dementia, Alzheimer’s, cancer, ALS, etc.) knowledge or experience
    • Passions and hobbies: These are the things that can make your team more human, personable, and also add connection points for clients/prospects.
    • Interests for yourself
    • Interests for retiring leader
    • Interests for remaining team members (Fitness, Golf, Travel, Cooking, Wine, Gardening, Art)

    Are there related parties on your current team (parents, siblings, relatives), or is there a plan (either verbal or written) to bring on a family member?

    There is nothing that can blindside and create team angst than a surprise family member joining the team. Be sure to have a clear and open dialogue about the plans well in advance.

    How would adding a new team member impact your team culture? How can you help ensure they’d be a good fit for the future you envision?

  2. Ask for Team Feedback on Your Plan, Before the Retiring Leader Departs

    This is the time to gather all team members (including the retiring leader) around the table to discuss next steps. If the retiring leader has “buy-in” on the plans, it will signal to the entire team that this is a sound strategy and will help assuage their fears or concerns about the future.

    Once you’ve set the timeline, it’s time to bring the team up to speed on your plan, so they are not blindsided. Discussing the transition plan with your team members will help them feel as if they are part of the process, as opposed to being “told” about the transition.

    Schedule a team meeting and gather their feedback:

    • Brainstorm with the team about what knowledge, experience, and skills are most important for the team (both now and in the future)
    • Discuss possibilities of expanding roles and responsibilities of existing team members based on strengths and skillsets
    • Working together, begin to articulate each person’s future role, especially in the absence of the retiring leader
    • Discuss various life experiences, passions, etc. of your team members. How can the team use them to deliver more empathy and tailored advice to your clients, who may be experiencing similar life events? The things that make our mosaic of life could end up being the best business-building skills, and they’re often overlooked!
    • Make a list on a whiteboard (or virtual whiteboard) of what the team thinks matters most if you were to hire a new team member. Take a photo of the board and document this list in writing.
    • Think beyond traditional financial professional skills. Ask for the team’s input on hiring a different kind of professional with experience in dealing with people, emotions, wellbeing, and health, etc.
  3. Deliver the News to Clients—With a Plan and Strategy

    This is a delicate conversation and should be handled with care and the utmost professionalism. Craft a message that clearly articulates the transition plan. Test delivering your message to a team member and gather feedback. Practice the message; this is not the time to shoot from the hip!

    You and your team members should be able to deliver the message with care and confidence. It should be:

    • Respectful of the past: Share empathy regarding clients’ long-tenured relationships with the retiring leader because many clients will miss him or her.
    • Realistic about the present: Inform them about the transition. This is a big change, so have empathy when speaking with clients. Be sure to tell them what they can expect to stay the same (i.e., highlight the positive).
    • Optimistic about the future: Talk about new expectations. Enthusiastically share any new team skills, services, or solutions you’re planning that may interest them.

    Use the methods below to tell clients about the upcoming retirement of the team leader

    • A personal call from retiring leader to top client segment(s)
    • An email (or letter, if the preferred mode of communication) that outlines key aspects of the transition plan to all clients
    • Follow up to written announcement with a phone call to mid-to-lower segments
    • Create a team brochure or newsletter that includes:
    • Photos of each team member
    • Their stories
    • A personal fact
    • A “thank you” to clients for their loyalty

    Ask remaining team members to call clients to introduce themselves on a rotating basis Build trust with clients

    • This is an incredibly important aspect of the process and does not happen with one phone call or meeting. Document a plan for team members to introduce themselves to clients repeatedly.
    • We, as humans, don’t automatically trust someone after one encounter. Trust is a process and takes many interactions to build. Keep this in mind when planning the full team’s introduction or reintroduction to clients.
    • During your client conversations, remember the longstanding relationship that clients had with the retiring leader. They’re personal relationships that developed over time. You can’t build that rapport in a quick email or phone call. It takes proactive and deliberate contact to establish trust and solidify the relationships.


The Success of Your Succession Transition Is Contingent Upon a Clear, Concise Written Plan

We’ve all heard the adage, “if you fail to plan, you plan to fail.” This is one of those moments where the plan can truly make all the difference with strong asset and client retention, as well as team culture. This is not the time to wing it. It’s time for a thoughtful, clearly articulated approach.

About The Author
Julie L. Genjac

Julie engages and educates financial professionals and their clients about emerging opportunities in financial services. These opportunities range from practice management and team dynamics to anticipating and preparing for long-term demographic and lifestyle changes. Julie is also the co-host of the Hartford Funds Human-centric Investing Podcast, which features conversations with thought leaders from inside and outside the financial services industry.  

Next Steps

1 Schedule a conversation with the retiring leader
2 Build a calendar of events
3 Think about your vision for the team (Consider MIT AgeLab resources—The Future of Advice)


Related Topic: Small Team Changes, Big Results >

financial professional icon

Financial Professionals

This article is based off of our popular Why Many Teams Struggle (4 Ways to Improve Team Efficiency) module. Click here to access additional content to share.


Subscribe to Practice Management


The MIT AgeLab is not an affiliate or subsidiary of Hartford Funds.


The material on this site is for informational and educational purposes only. The material should not be considered tax or legal advice and is not to be relied on as a forecast. The material is also not a recommendation or advice regarding any particular security, strategy or product. Hartford Funds does not represent that any products or strategies discussed are appropriate for any particular investor so investors should seek their own professional advice before investing. Hartford Funds does not serve as a fiduciary. Content is current as of the publication date or date indicated, and may be superseded by subsequent market and economic conditions.

Investing involves risk, including the possible loss of principal. Investors should carefully consider a fund's investment objectives, risks, charges and expenses. This and other important information is contained in the mutual fund, or ETF summary prospectus and/or prospectus, which can be obtained from a financial professional and should be read carefully before investing.

Mutual funds are distributed by Hartford Funds Distributors, LLC (HFD), Member FINRA|SIPC. ETFs are distributed by ALPS Distributors, Inc. (ALPS). Advisory services may be provided by Hartford Funds Management Company, LLC (HFMC) or its wholly owned subsidiary, Lattice Strategies LLC (Lattice). Certain funds are sub-advised by Wellington Management Company LLP and/or Schroder Investment Management North America Inc (SIMNA). Schroder Investment Management North America Ltd. (SIMNA Ltd) serves as a secondary sub-adviser to certain funds. HFMC, Lattice, Wellington Management, SIMNA, and SIMNA Ltd. are all SEC registered investment advisers. Hartford Funds refers to HFD, Lattice, and HFMC, which are not affiliated with any sub-adviser or ALPS. The funds and other products referred to on this Site may be offered and sold only to persons in the United States and its territories.

© Copyright 2024 Hartford Funds Management Group, Inc. All Rights Reserved. Not FDIC Insured | No Bank Guarantee | May Lose Value