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Succession Planning: How Wealth Advisors Can Ensure a Thriving Business for Years to Come

According to a Financial Planning Association Survey, 73% of financial advisors have not created a succession plan for their business. But there are great benefits for advisors who are willing to create a succession plan, and there are benefits to starting early. 

Here’s what financial advisors need to know when it comes to successful succession planning.

What is succession planning? 

Succession planning refers to advance planning to successfully transition your business in preparation of your departure. Succession planning ensures your business is fully-prepared to handle the transition from certain leadership roles to others, and that employees are well-trained and fully-prepared to fulfill their new roles.

In order to execute a proper succession plan, organizations should plan far in advance, regularly around 12 to 36 months depending on the size of the business.

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While internal preparation such as training current employees to assume the roles of new ones, or hiring new employees to fill gaps, is imperative, there is planning for external stakeholders that must be done as well.

Benefits of early succession planning for advisors 

As an advisor, you’ll need to have a plan in place to ensure your clients are well taken care of after your departure.

Even if you’re years away from retirement and think it’s too early to start, it might not be. In fact, advisors who start succession planning early on may experience great success during the final years of their career, as the new strategies they’ve implemented actually help them win high quality clients and better serve their existing clients. 

Prepare your business for years to come

To execute a successful succession plan, you need to ensure that your firm will thrive far after your departure.

This means that even if your existing advisory strategy is working for you, your staff, and your clients right now, it may not a few years from now. If the future needs of your current clients, as well as the needs of potential clients, are not taken into account far in advance, the business may risk losing business to better-equipped firms who can meet those needs.

Make sure to pay attention to where the industry may be headed in the future. A couple key trends to take into consideration right now, such as a technology-first approach as well as incorporating alternative investments, will set your business apart from others after your departure, as well as during the final years of your career.

If you’re an advisor interested in offering alternative investments to set your business up for a successful future, please get in touch.

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