Continuing the message from recent weeks, what plans and conversations have you had around succession planning?
Over half of the advisors that I have worked with are focused on this conversation. The remainder is still in the growth stages of their businesses, also a necessary component for those pursuing succession. With all the studies, white papers and presentations by a variety of experts, one would think that selling to a third party is the most desirable avenue for succession. Yet, according to the Financial Planning Association’s Research & Practice Institute report and Angie Herbers’ recent white paper on succession planning, most advisors prefer an internal transfer rather than a sale to a third party. The same is true with the advisors I serve.
So how do you get this conversation started? Here are a few tips:
- Start now. It is never too early to begin this conversation. Even if it is just you and your pencils, think about the outcome you want. Beginning with the end in mind is one of the 7 Habits of Highly Effective People, as described in the book of the same name by Stephen R. Covey.
- Design your personal life plan. What do you want your life to look like? What experiences do you want to have? What do you want to accomplish? Is there a legacy you want to endure beyond your lifespan?
- Build your business to support your life plan. There are two parts to this: the financial side to support the things you want to do and the structure side that will provide the freedom to do the things you want to do.
- Develop your business model. This model is based on your Ideal Client — those who you serve well who value and appreciate the service you provide.
- Define your Client Experience. Start with why (and check out the book of the same name) and then determine the how and the what.
- Develop your team. Beyond your Ideal Client, here is where who comes into the equation. Know what your strengths are, then fill in your team with those whose strengths complement and complete yours.
- Identify your succession strategy. Completing the above steps will make this the natural, next step. You will know what you want the strategy to be (see Step 1) and it will be far easier to identify the successor (an individual, a firm, etc.).
These seven steps are simply an overview of the process. You know that time and energy must be invested to make succession, and business planning, a success. Most of us cannot do it alone.
Here are two free resources to support you:
- Download the Practice Directions Assessment to see where you are in the process of building a successful business and life.
- Register for the Expert Series Interview, featuring Angie Herbers discussing her white paper on Succession Planning.
Not only will this process help you succeed in life, it will enable you to have the conversation with your clients. You can lead them through the process as you will have already been down the path.