Succession Planning 101

What does one do when they own a practice or business and they want to retire? What happens to all of the hard-earned relationships that are built? Who continues to run the company? All of these questions can be solved when an organization addresses succession planning. This is the process whereby an organization ensures that employees are recruited and developed to fill key roles within a company. At advisorRETIRE™, we’ve helped thousands of independent advisors with their succession plans as they cash out of their practice and move effortlessly into retirement. If you’re thinking about retiring within the next three to five years, it could be time to address your succession plan with a professional. Before you reach out to a succession planning expert, make sure you understand the basics of what goes into a succession plan.

Succession Planning 101

There are many reasons why organizations should be thinking about their succession plan, yet many companies fail to give the matter sufficient attention. No matter how certain a business’ future may appear, if key players retire or exit for any reason, the dynamics of the business will inevitably change. In order for the value of the business to be maintained or enhanced, a well-thought succession plan can help make the transition process a smooth one. Succession planning is a great reality check, as it acknowledges that staff will not be with an organization indefinitely and it provides a plan and process for addressing these changes in the event that they do occur. The benefits of a great succession plan include:

• A means of ensuring that your organization is prepared when executive managers and senior employees leave the company.
• A plan to support service continuity during unforeseen events and an evaluation of qualified employees to fill these roles.
• A commitment to developing clear career paths for employees which will help you to retain top-performing employees.
• An external reputation as an employer that invests in its people and provides internal growth opportunities.
• A clear message to your employees that they are valuable

Without a proper succession plan, you may accidentally undermine your organization’s overall effectiveness and sustainability. In the event that someone retires or leaves the organization, it’s important to have a plan in place to ensure your operation stays afloat. While you may feel that creating a succession plan isn’t necessarily an urgent matter, below are some other reasons why you shouldn’t wait to construct a succession plan.

You Can’t Plan For Disaster

As invincible as we may feel sometimes, you just can’t plan for disaster. No matter how amazing your staff is at revenue projections or future economic predictions, no one really knows when a catastrophic event will occur. Whether your company is hit with an unforeseen employee illness, natural disaster, or a CEO’s unexpected decision to retire, a properly built succession plan can help your company stay afloat during critical transitions.

If you’re an independent financial advisor who is thinking about retirement, sign up at advisorRETIRE™ today! Our succession planning professionals will conduct a free evaluation of your practice so you can decide whether or not you’re ready to take the leap into retirement!

A Succession Plan Will Benefit Your Business Now

One thing many business owners don’t realize is that a succession plan will benefit their business now. When you take the time to sit down and plan out your company’s succession plan, you will build stronger relationships along the way that will help your business survive the daily changes in the marketplace. This will force you to evaluate your management team in the case that employees need to be shuffled around in the future. When faced with unforeseen circumstances, the best thing we can do is prepare.

Succession Plans Give Employees A Voice

If you own or run a family business, the process of succession planning will give your family members and employees an opportunity to express their needs and concerns for the company. Discussing this with your coworkers will help them to feel valued and empowered and it will also help get everyone on the same page. Resist the temptation to take the reigns of succession planning and try to get everyone involved in the process.

You’ll Get To See The Big Picture

When an important manager or CEO leaves a company, people often rush to look for a high-level replacement outside of their business. While it’s certainly understandable wanting to fill the role quickly, a succession plan will force you to examine all levels of employees. It’s important to remember that the people who are working with you day in and day out are the ones helping to keep your business going. If you neglect to add your all-star employees to your succession plan, it could have negative consequences. As you develop your plan, try your best to incorporate all levels of management so everyone feels secure and safe in their role during a catastrophic event.

At advisorRETIRE™, we understand how scary it can be to think about building a succession plan, especially if you own your own financial advisory practice or business. Whether you’re trying to sell your practice or retire from your role in a few years, our experts can help you transition at your own pace.

Strengthen Departmental Relationships

If you plan on retiring from your practice and you want to leave your employees feeling confident for the future, try to include them during your succession planning process. When regular communication occurs between different departments, trust and synergy develop. It may also be wise to include your HR department in your succession plan, so you can incorporate elements such as employee evaluations when the time comes to fill vacancies with internal candidates.

The Basic Principles of Succession Planning

Both the board and executive director of a company have pivotal roles to play in creating a succession plan. The board is often responsible for planning the replacement of the executive director position to ensure that it has a skilled manager who can uphold the organization’s mission and vision. More often than not, boards find that they are unprepared for such occurrences and they are left scrambling to fill such big shoes. The executive director, on the other hand, is responsible for ensuring a proper succession plan is put in place for the other key positions within the organization. These are likely developed with help from the management team and input from valued employees.

The professional succession planners at advisorRETIRE™ have come together to create a list of basic principles to remember during your succession planning process.

Don’t Wait Until Employees Leave To Start Planning

One of the worst things a company can do is to wait until their employees start leaving before they create a succession plan. As the old saying goes, an ounce of prevention is worth a pound of cure, and the sooner you start preparing for the known, the better equipped you will be.

Utilize Your Senior Staff

When forming your succession plan, be sure to utilize the skills and expertise of your senior staff. While each and every one of your employees may not plan to work at your organization forever, your senior staff will have valuable insight on the future successes of your company. If you’re stuck on a particular part of your succession plan, don’t be afraid to reach out and ask managers for help.

Learn To Let Go

One of the biggest challenges many CEO’s and managers face with succession planning is learning to let go. This can be especially difficult for independent advisors who have built their company from the ground up. When it comes to successful succession planning, it’s important to leave emotions and clouded judgment at the door.

Planning Your Retirement With advisorRETIRE™

If you’re an independent financial advisor who is thinking about selling their business and retiring within the next five years, consider planning your retirement with advisorRETIRE™. We offer a two- to three-year program that will allow you to start building a solid succession plan from day one. Not only will you gain peace of mind knowing you can retire seamlessly, your clients will benefit by tapping into our five-star service and review process. Your clients will also feel confident and secure knowing that there is a plan in place for their accounts to be sustained and managed correctly once retirement day rolls around and you are no longer their advisor. If you’re interested in learning more about our succession planning services, contact us today!