A bad ending can ruin a movie or a TV series, just ask any Game of Thrones viewer. The same applies to any business including financial advisory practices. A great run can be marred by a messy and unorganized ending.

However, it’s easy to understand why an advisor laser-focused on building and operating a business may not put the same intensity or focus into succession planning. After all, there are many heavy decisions that have to be made, and each decision has major implications. So, it’s understandable why succession planning can be neglected.

Nevertheless, it’s clear that succession planning is essential. In the same way that financial planning increases the odds that someone can reach their retirement goals, succession planning can help you maximize the value of a practice, smooth the transition for clients, and give employees peace of mind.

While there are many elements to effective succession planning, the biggest ingredient is transparency throughout the process with clients, employees, and other stakeholders. This will prevent anyone from being surprised by the outcome and will also lead to more understanding especially as it’s likely that the succession plan could have multiple iterations depending on circumstances and developments. 

Finsum: Succession planning is essential for an advisor but an important key is transparency during the process.