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Succession Planning for your Financial Advisor

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By: Colleen Farley

Managing Principal

Robbins Farley, LCC

Succession Planning:
                                    For your Financial Advisor
 

How long have you been working with your trusted Financial Advisor?   As you would expect, in most cases, folks have been working with their financial advisor for many years.  There is a trust level that has been gained over the years through births, deaths, weddings, and maybe even divorces.  But most important are the bonds and trust that occur throughout the market cycle; recession and bull market.

Recently we met with a gentleman who had been working with his financial advisor for over 20 years. They were friends from college and similar in age.  This is very common.  He received a call from his advisor’s branch manager, alerting him to the fact that his advisor had been diagnosed with a fatal disease and would no longer be servicing his accounts.  In fact, he was so sick; he was given only a few weeks to live. 

We sat across this gentleman, clearly shaken, asking “now what?”  The client had to find a new relationship in an emergency interviewing process.  That feeling of uncertainty, especially during volatile market conditions, isn’t easy.  He felt a bit alone and didn’t know where to turn.  I have to ask, why didn’t the advisor have a succession plan?  He didn’t plan for an an event like this.  As an advisor, you always ask, what could happen?  What could happen to this retirement plan, if my client gets sick?  What could happen to this investment strategy, if a recession hits?  Shouldn’t we do the same for our business and more importantly, for our clients?

As the largest investing population is currently the baby boomers, it’s interesting to find that so are the largest population of Financial Advisors.  So while they are helping you plan for your retirement, they are probably planning for their own.  So, I ask, what happens when your financial advisor retires?  Or worse, dies.  Does your financial advisor have a succession plan?  Or more importantly do you have an advisory succession plan?

 

Ask yourself a few questions:

1.       Are the requirements different for a financial plan during retirement?  I will no longer be accumulating wealth, but utilizing my wealth.  Do I want a different knowledge base in my advisor?

2.       Will the new advisor be familiar with my family, my relationships, my values, my goals as well as my assets?

3.       If something happens to me, will my advisor be comfortable working with the generational communication gaps that exist in my family?

4.       Am I comfortable working with a financial advisor team that is multigenerational?

 

Then, ask yourself, “Do I have a succession plan for my advisor?”   

 If not, it may be time for a second opinion.

 

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This award was issued on 9/1/24 by Five Star Professional (FSP) for the time period 12/12/23 through 7/9/24. Fee paid for use of marketing materials. Self-completed questionnaire was used for rating. This rating is not related to the quality of the investment advice and based solely on the disclosed criteria. 1094 New Hampshire-area wealth managers were considered for the award; 87 (8 % of candidates) were named 2024 Five Star Wealth Managers. The following prior year statistics use this format: YEAR: # Considered, # Winners, % of candidates, Issued Date, Research Period. 2023: 1,017, 89, 9%, 9/1/23, 12/12/22 - 6/30/23; 2022: 979, 87, 9%, 9/1/22, 12/20/21 - 6/17/22; 2021: 943, 96, 10%, 9/1/21, 11/30/20 - 6/25/21; 2020: 928, 91, 10%, 9/1/20, 12/9/19 - 7/1/20; 2019: 928, 85, 9%, 9/1/19, 11/19/18 - 7/10/19; 2018: 955, 74, 8%, 9/1/18, 12/26/17 - 7/17/18; 2017: 739, 89, 12%, 9/1/17, 12/27/16 - 7/6/17; 2016: 666, 158, 24%, 8/1/16, 2/6/16 - 7/19/16; 2015: 853, 166, 19%, 9/1/15, 2/6/15 - 7/19/15; 2014: 1045, 189, 18%, 9/1/14, 2/6/14 - 7/19/14; 2013: 1049, 204, 19%, 9/1/13, 2/6/13 - 7/19/13; 2012: 743, 170, 23%, 9/1/12, 2/6/12 - 7/19/12.
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