6 Reasons Why You Should Develop a Succession Plan This Week
Your ultimate success depends on your ability to create and maintain long-term relationships – relationships that are built on trust. If you want clients to trust you, they need to know you will be there for the rest of their lives. So, let them know you will put their interests above yours: Let them know that you have a succession plan.
Here are 6 reasons why you should have a succession plan in place.
#1. Having a succession plan shows you’re thinking long-term.
If you think short-term, you may get lured into the trap of thinking that you should be constantly opening new accounts. This could result in seeing your standards and service slip. If you think long-term on the other hand, you will be better able to focus on nurturing existing relationships.
Imagine your client being asked by a friend looking for an Advisor if your client is happy with you. Your client says, “Yes, but I’m not sure how much longer my Advisor will be around.”
#2. Your long-term vision makes you a unique and valuable commodity.
Clients expect you to be honest, to care about them, to lead them and provide great communication.
In addition, if you think of your clients as clients for life (and even beyond) you’ll be offering them a level of caring service seldom found elsewhere. While they may not put it into words, clients will wonder what will happen to their money should anything happen to you. So, spark a discussion around your own ‘succession plan’ to put them at ease. By doing so you’ll come across as a long-term planner for your own business, as well as an advisor who is truly concerned about their hard-earned money in any eventuality – even in your absence.
#3. When you have a succession plan, clients will be more likely to share their assets and their children’s’ assets with you.
If clients perceive you as a business that’s going to be around for a long time, they will be more likely to trust you with their assets and hopefully so will their descendants. With such a high percentage of clients nearing retirement right now advisors (and their successors) need to get to know their client’s children and heirs before they inherit their parents’ wealth.
#4. If you don’t have a succession plan, you’re doing your clients a disservice.
If you don’t have a clear plan you will be doing your clients a disservice. It can take five years to train someone to take over your business – so if you don’t have a plan mapped out, now’s the time to start.
You need a clear idea of the skills a successor must have to run the business. Then take practical steps towards implementing your succession plan. Ask yourself questions such as: Do you want to transfer the business to a family member or junior partner? Do you plan to fully retire or retain a controlling interest?
#5. Having a succession plan ensures your hard work won’t go to waste.
Having put all your time and effort into growing your business, you won’t want to see it fall apart after you retire. By building a succession plan you’ll feel secure that your practice will continue to grow and make you proud after you retire. Your business is important and personal to you so choosing the right person or company to take over is of paramount importance.
#6. Successful advisors tend to have succession plans.
Research indicates that advisors often fall short on developing a succession plan. A study by Fidelity revealed that while two-thirds of advisory firms would like to change ownership internally, only a quarter had a clear succession plan. The idea of a succession plan is even more daunting if you are a one-person business.
Fidelity also revealed that a higher percentage of the most successful practices are prepared. More than half of them have a succession plan in place. So be like the successful practices and get your succession plan developed this week, then communicate it to clients and prospects.
Succession planning is not something many of us like to think about but you need to remember that it’s not about you – its’ about your clients and their well-being. As uncomfortable as it is you owe it to your clients to ensure they are taken care of no matter what.