Updated Thursday, October 23, 2014 as of 5:22 AM ET

Succession Planning: Are You Being Negligent?

Here’s a bucket of cold water coming at all you RIA founders: You’re going to die.

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Comments (4)
You're going to die!

Ominous isn't it........... but sadly a reality.

At my old custodial employer..........so many times I remember taking calls from the actual client saying their financial advisor passed away and did not know what to do. Sadly these client accounts were simply moved to the ''retail side'' of the brokerage firm I worked with. The LPOA (Limited Power of Attorney) the advisor had on the account was simply revoked/removed, the account number was changed to a retail account, and the client was left to fend for themselves.

One option is advisors (baby boomers especially) should consider taking on a GenY (or GenX) planner for that just in case moment. It'll help with the succession and business continuity arrangements.

.............. just my .02 cents...............
Posted by MARTY M | Friday, February 21 2014 at 8:44AM ET
It is time for "Practice what you preach"! Nothing can be better than demonstrating to the client that you know your job, if you are successful in implementing a succession plan. A good manager is one who builds up a team and leaves clear instructions on how things are to be addressed in different scenarios. The same is true of a financial planner, more so. You owe it to the client who has trusted you with his hard-earned money that you pass on the mantle to responsible shoulders. Let this be a wake-up call to all.
Posted by KIMMY B | Friday, February 21 2014 at 10:14AM ET
Exit and transition planning is an art and a science. Much about human behavior is what drives the process. An RIA might be far better off to engage the services of professionals that specialize in this area, particularly succession for RIA's.
This is the process that we recommend: Most RIA's for the most part are family and privately owned businesses. 4 written plans are required. Owners plan, company plan, family plan(s) and then the succession plan. Then each plan requires addressing 2 dimensions; the hard side and the soft side components. All of the measuring and communication will vet out a well structured exit and transition.
Posted by Michael C | Saturday, February 22 2014 at 8:44AM ET
Not only has an individual or family given us their money to invest, but more importantly have shared their personal issues and desires. That is very hard to carry on to another advisor, especially some one they don't know. I'm with Kimmy, build a team. We have four in our firm and our clients meet with at least two of us each time, some on a rotating basis, and know they can talk with any one of us. We are from 40 years old to 66. It's a nice spread in age. As to succession planning for my firm, my team would buy the firm over time. Cash flow is released to me over time rather than only at the end. Perhaps that woudl be a good plan for any one that is afraid to let go all at once.
Posted by Deborah S | Saturday, February 22 2014 at 7:13PM ET
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