15 questions to help smooth your succession transition

With 43% of the U.S. advisor population pushing 55 years and older¹ and 31% of advisors reportedly contemplating retirement in the next 10 years², succession planning is on the minds of many. Maybe you are even one of them. Orchestrating a transition that converts decades worth of sweat equity into a dollar figure with the least possible amount of disruption to staff and clients is not for the faint of heart. Time and intentional planning are baseline requirements. But, the financial and emotional rewards of a well-executed transition can be significant for all parties involved: the incumbent, the successor, staff and clients. A defining moment in the succession process is when the ownership equity needle tips from 49% to 51% in favor of the successor. For the incumbent, the business they built from scratch is now majority owned by someone else. For the successor, there’s a new weight of responsibility of owning most of a business. For the overall business, though, it’s an indication of a healthy transition: Typically, it means that many critical role clarity and communication details have been ironed out and are progressing smoothly. What are some of the most important role clarity and communication strategies? In our experience, critical questions to have clarified include:

Role clarity

To help prevent animosity from building up within the team by agreeing in advance on the roles and responsibilities of the senior advisory and the successor at various points durinthe transition, be sure to consider: 

Communication strategy

Clear communications about the transition help set staff and client expectations—especially in cases where the senior advisor continues to play a role in the business.

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¹ Source: https://www.fa-mag.com/news/43--of-all-advisors-are-approaching-retirement--says-cerulli-16661.html

² Source: https://www.investmentnews.com/advisory-firms-threatened-by-attrition-as-advisers-retire-or-go-independent-j-d-power-68278