Updated Sunday, August 30, 2015 as of 10:38 PM ET

Secrets to a Successful Succession

We have a serious problem. There are not enough financial advisors being trained and coming through normal channels to replace all those advisors who want to retire and sell their practices. If you are a buyer, well things are about to get really good. There will be a lot, again, a lot of practices up for sale.

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Comments (3)
As a succession planning consultant to financial advisors with more than a decade of experience, I have to agree with almost every point the author makes, with the exception of #3. Actually, for advisors with smaller books of business I agree...but for larger businesses this kind of thinking can undermine your succession plan. I've heard this same misstatement from some of my advisor clients so I think it is worth mentioning.

First generation practices - you have to be able to sell to build your business and survive. However, when looking for a successor to continue building your legacy after you're gone, you often need a different skill set than the one that got you to where you are today. When you've built a large business, your successor doesn't have to be a great sales person, they have to be a great CEO. Granted, being able to sell doesn't hurt, but it is not the number one trait advisors should be looking for in a successor --- you need someone who can lead. Too many advisors want someone just like themselves to run their business, and they end up with someone who is just like them...a great sales person and terrible at running a business.
Posted by David G | Tuesday, November 20 2012 at 6:49PM ET
Another thought to consider regarding suggestion #10 is partial book sales. Before you fire a group of your "less desirable" clients, consider selling them to a junior advisor. Your "C" clients are another advisors "A" clients, which allows the seller to monetize a portion of their book and at the same time, know that their clients are going to receive even better service after the partial book sale.
Posted by David G | Tuesday, November 20 2012 at 7:08PM ET
When it comes time to meet with the clients after the sale, I would highly recommend starting with the smallest accounts first until you have honed your pitch. As the author mentions, buyer and seller will meet with clients hundreds of times together. A little practice goes a long way.

Many of the deals we have done here at Succession Resource Group have met with the biggest clients first because they wanted to make sure they retained the most important clients. However, even when you are prepared, the first few meetings can be difficult.

David Grau Jr.
Posted by David G | Tuesday, November 20 2012 at 7:19PM ET
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