No Way to Run Your Business!

I recently joined a roundtable study group session with 12 financial advisors where I facilitated a marketing and business development discussion.  These small business owners were smart, successful, innovative and passionate about helping their clients.  As I looked around the table, I noted that every person was between 50-65 years of age, so I asked the question, “What’s the plan for your retirement?”

Not one had an actual plan. There were two who had identified a sales assistant or junior advisor in the firm that they felt would take up the reins, but there was no actual framework in place for this potential transition. So I asked them, “What happens to your business if you are not here tomorrow? What will your clients do?”

As you might imagine, everyone agreed that they must get started on mapping this out soon. However, what surprised me was that no one at the table thought that their clients were too concerned about their aging advisor!  According to a 2013 Accenture report, the average age of a financial adviser in the U.S. is 50, and financial advisers past the age of 60 control $2.3 trillion of client assets.  Since fewer than one in three has a formal plan for handing off these clients, I can’t imagine a worse scenario for an advisor wanting to maintain their legacy.

As these financial advisors are aging, so are their clients. If these small business owners think their clients aren’t wondering what will happen when their advisor retires and who will take care of their assets or work with their children, they are fooling themselves. In fact, Time magazine published an entire article about how to handle this issue and what a client should ask. The article suggested asking specifically about the transition, how this will impact them directly, and if they were not happy with the answers, consider an upgrade!

No matter what your industry, any business owner needs a succession plan. There is a myriad of resources out there to help.  Get started now, so when your existing client or potential new client asks, “What is your retirement plan?” – you won’t stammer through an answer and appear disorganized.  That is no way to run your business.

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