DALLAS - For financial planners, succession plan, or lack there of, merits attention regardless of the amount of assets they manage.
Clients care about who will takeover their assets if something happens to their advisor. Kelli Cruz, managing director of Pepin Consulting, which consults with planners about succession, sends that message loud and clear. You plan for your clients retirement, what about yours? she said at the Women Advisors Forum on Thursday.
Cruz and a panel of advisors who have implemented successful succession plans agreed that starting early, preparing well and mentoring all help make a transition possible when necessary.
Some of the most successful successions stem from family relationships, according to Marie Moore, executive director and financial advisor at The Moore Group at Morgan Stanley in Dallas.
Moore, who works with her son, warns that such a family arrangement can be challenging. She finds it hard, for example, to decide with her son when to don my mom hat or my partner hat.
Janet Briaud, president and chief investment officer Briaud Financial Advisors in College Station, Texas, and her daughter Natalie Briaud, who serves as the firms chief operating officer, shared stories of when the mix-up of family and firm triggers mini melodramas. The mother and daughter recall, for instance, how they untangled the tough valuation issue when Natalie sought to buy half of her mothers business.
Janet Briaud hesitated but she also wanted help with a firm that has accumulated $485 million in assets under management.
I was alone, she said.
When it came to buying in, however, Natalie said she tried to get a stake as cheap as possible. And, at the same time, she said, her mother claimed Everything was wonderful.
As a solution, they ultimately developed a valuation model. That model, because theirs is a fee-based practice, relies on data about clients expected returns, ages, and life expectancies.
As far as working together, mother and daughter have still not ironed out every wrinkle. Natalie says that her mother still fails consistently to take Fridays off as she had been scheduled to do when the agreed to their partnership.
Debra Brennan Tagg, the managing director of Brennan Financial Advisor, represents an integral part of the succession plan for the Dallas-based firm her father started. Tagg and her siblings each have relationships with clients but its understood: the clients belong to the firm. Should something happen to a family member, the clients would be assigned to other members of the family. In the meantime, the family shares marketing and compliance among other services and they each have certified assistants who could handle the clients of each other should something happen to one of them.
A client walked into the office and Tagg said his comments underscored the significance of the familys succession plan. He told her, You dont know how comfortable it makes me feel to know if something happens to you, there are others here who can handle my assets.