“Time flies”. It is common verbiage amongst most humans, and especially prevalent with financial services professionals. Whether sole practitioner, or leading a team of multiple advisors, time spent on the business often escapes even the finest time managers. From reviewing markets and product options, to daily client management and planning needs, time escapes the best of us.
What is your number? When asked when do you plan to exit your business, what would your immediate response be? The top three financial professional answers are; “haven’t thought about it”, “10 years plus”, or “never” (when I die).
Each of these answers delays the necessity to discuss and plan through what is needed in a successful succession plan. A delayed approach to planning for business succession can have multiple impacts that will mostly impair the future value and structure of the business. Financial professionals that have taken the proactive approach to planning for the eventual transfer of their business assets are already seeing the return on their investment. Here are 5 things established advisors are doing now.
- Creating and Implementing Strategic Growth Plans – the key takeaway is implementation. Many advisors work diligently in creating the strategic initiatives for their businesses, but fail to execute. Alone or with your key team members, diligently create the growth plans for the next 1, 3 and 5 years. When complete, decide who shall be accountable to each specific item. Review regularly to quantify progress.
- Systematize Everything – Understand there is tremendous value in internal processes. All internal workflow should be systematized to ensure ease in transition to future team members and your future successor. Begin with macro processes all the way to how your clients expect the phones to be answered. Map all processes using your favorite technology for future review, alteration, training and transfer.
- Implement Continuity or Shareholder Planning Internally – Your future successor will likely come from within. Should a triggering event such as death or severe disability occur, a proper plan will allow the business to continue, and key employees will be rewarded appropriately.
- Mentoring Next Generation – Advisors are locked down each day with tactical needs, mostly client procurement and retention. Mentoring next generation advisors to create your future succession resource is vital. Spend the time to create and time-manage an effective mentoring model.
- Alternative Revenue Models – Advisors face new scrutiny and opportunity with the ever-changing financial services landscape. Successful advisors look to new revenue opportunities such as adding a new line of business or charging monthly retainer fees to clients who do not have the assets yet to invest. Today there are multiple opportunities to increase EBITDA without substantially altering your business model.
For more information on how to build a successful succession plan, contact your FIG Sales Consultant today!