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.
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.