Succession planning is increasingly important with the heightened pace of M&A activity and the ‘greying’ of the industry. It can ensure the smooth transfer of clients, assets, and responsibilities when an advisor retires. 

The process entails identifying who is best qualified to be your successor, ensuring clients concerns are addressed, and regulations are followed. The goal is to ensure that the business continues operating without interruption while preserving the value of the practice.

In terms of identifying potential successors, it’s important to determine whether there is the right alignment with the firm’s values, vision, and approach towards clients in addition to the proper experience, knowledge, and skills. They must also possess some leadership ability as they will have to make important decisions and lead the firm. Finally, these attributes can be developed through mentoring and guidance. 

Another element is maximizing client satisfaction and retention through the process. This can be done by introducing the new advisor to clients well in advance and working in tandem for some period before fully shifting responsibilities. It’s also important to stay in regular communication with all stakeholders during the process including clients, employees, and other partners. 

Finsum: Succession planning is increasingly important due to the ‘greying’ of the industry and increase in M&A activity. Here are some important considerations.