According to a 2018 Financial Planning Association and Janus Henderson Investors study, 73% of private client advisors do not have a formal succession plan in place.

Succession planning requires thoughtful groundwork and a proper plan to execute. Many private client advisors are expected to retire in the next 10 years, and many of their assets need transition planning. How do you avoid client attrition risk while your top advisors retire and leave the firm?

Succession planning isn’t only about preparing your firm for filling gaps left by retired advisors, it is also about creating a continuity plan for the time when you may need a transfer of ownership to another person or entity.

Hence, having a set plan in place can help you prepare for the future and also avoid any unforeseen situations.

Building a Succession Plan

Review your business goals and objectives. A successful succession plan must be aligned with personal and business goals. Your succession plan should work towards identifying best possible outcome for your firm.

With the execution of a succession plan, new challenges can arise. For example, an internal succession plan can strengthen a firm, but it can also prevent the next generation of advisors from joining the firm. Hiring next generation talent is crucial to the growth of the firm.

Record Everything in Writing

Have a detailed list of all your current and former clients. The advisors must document all conversations with their clients accurately and in detail. Create processes and workflows that are easily transferable to the next person who joins the firm. Ensure your CRM (Customer Relationship Management) is up to date, detailing all the investment strategies, client conversations, and onboarding planning.

Consult Legal Council

In an event of a death, disability, or voluntary transfer of ownership, have an internal succession plan in place for an internal transfer or sell out to an external buyer. Consult an attorney to identify best practices.

While it can be daunting to think about transitioning and training someone else, it is important to note that emergencies and unexpected situations are inevitable. A succession plan will ensure your business is in the right hands.

While grooming private client advisors internally is a great practice, it is also important to introduce the next generation of advisors in your firm. These advisors will take care of the business when your top advisors retire from the firm. Reach out to The Anderson Search Group to find the top talent in the commercial banks and private wealth industries.

Are you just starting out in the commercial banking industry or are you planning to switch roles? The Anderson Search Group can help you find the right match for you.