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Passing The Torch – Succession Planning, Part I

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Your succession plan is not just a blueprint for retirement, selling your business or a catastrophic continuity plan focused on legal issues and the best price.  This is a plan for long-term sustainability of the firm; a vital strategic process that nurtures and develops rising leaders in order to increase transferability and continue the legacy of the practice.

In our two-part series of succession planning, we will look at:

  • Motivating you to start creating your plan and empowering you to do so with little to no overwhelm in part one
  • An in-depth review of the key factors to succession to guide you through the process of successful implementation

The Succession Strategy

Purposeful planning is essential to the entire succession process and helps build strategies that benefit both the individual and the overall business.  Make sure you involve the right people, invest in the right tools and make the right decisions in order to achieve results.  The following provides an outline of the steps to incorporate in your succession strategy:

  • Evaluate the practice and define practice goals
  • Prepare yourself for transfer
  • Prepare the practice for transfer
  • Choose your successor(s)
  • Focus on development, refinement and planning
  • Prepare your clients for transfer

Common Misconceptions of Succession Planning

What It Is

                              What It Isn’t
 Develop talent to move forward  Identify immediate understudies
 Identify long-term goals  Unchanging firm structure
 Improve readiness/build a team to fit practice  “Back-up” candidates
 Develop large talent pool to fill vacancies  Catastrophic buy/sell agreement

  Overcome Risks and Reap The Benefits

You Don’t Have One

You Have One

 Fear of lost identity/control  Sustainability of the practice
 Fear of mortality/aging  Ongoing supply of well-trained talent
 Potential jeopardy to your family’s financial security  Available resources to aid future needs
 Fear of not finding an acceptable successor  Well-motivated team to continue your legacy
 No financial security for employees and clients  Improve all processes
 Grief over separation from the business  Improve service offerings

 Part II of succession planning will elaborate specifically on each step outlined above.  The actionable developmental steps provided will cover the process from start to finish.

The Tranquil Transition

Successful execution of your plan requires resilient structures, effective processes and dedicated talent in place to carry out the strategies defined above.  Implementation will guarantee the long-term sustainability of your practice that you have worked so hard to ensure.  Keep the following points in mind throughout the transition:

  • Blur the line between incoming and outgoing team members
  • Focus on improving communication
  • Clearly define behavioral steps
  • Utilize evaluation processes for real development of the succession plan

Always Be On The Lookout

Be adaptable to inevitable changes occurring in the practice; evolution not revolution.  There are both challenges and unforeseen changes that have the ability to restrict a good succession plan.

  • Challenges

Compensation for purchasing ownership, share valuation, percentage of equity to transfer, how to share decision making in management, financing new owner’s share purchase and cultural fit.

  • Unforseen Changes

Team roles, clients and most importantly, updating your succession plan during the building and execution stages.

The financial elements of a succession plan are significant, but not all encompassing.  The non-financial aspects influence the success or failure of the plan; they are most harmful if neglected.

The value of extraordinary human capital and robust processes allows evolution to occur evenly and without damage.

Don’t join the 50% of advisors that have not written a succession plan*

Make sure your business is one that others will want.  Develop the next generation of advisors that best fit the practice in order to increase transferability and continue your legacy.  The more indispensable you are, the higher the value your business will be when you leave.

The steps you take to define your succession plan, more specifically processes, clear roles and career paths, are as good for business today as it is tomorrow or10 years from now.  If you didn’t start early, start now!

A successful succession plan embodies a talent development mindset and establishes a performance culture throughout your firm.  If you can visualize the impact of a stellar succession plan, you need Ironstone to help you implement it!    *2012 In Advisor Solutions Succession Plan Study

Ironstone will evaluate your existing succession plan and strategize with you to gain optimal benefits.  If you haven’t implemented a succession plan, we will collaborate with you to develop a comprehensive plan.  We specialize in identifying gaps in your existing plan and will collaborate with you to develop solutions that are parallel in achieving the results your desire.

We are curious!!  Have you developed your succession plan?   Let us know!

Follow us as we explore each of Ironstone’s Fundamental 4™!

  • Strategic Planning
  • Business Development
  • Operational Effectiveness
  • The Human Element

Coming up next, learn about Business Development and Client Appreciation!

• Email us at info@ironstonehq.com
• Call our office at 800-917-8020
• Connect with us:

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Author: Andrea Schlapia

Over 20 years of experience in the financial industry and thousands of business professionals • Founder and CEO of Ironstone, • Certified Myers-Briggs Master Practitioner, performance culture and sales communication strategist • Certified Executive Coach through Coach U • Dynamic and entertaining keynote speaker at national conferences, breakout sessions and “lunch and learn” events • Motivating and real-world tactics delivered through value-added programs for Wirehouse, Independent and Banking channels • Accolades for the highest program evaluations and continuous return-speaking requests. • Dedicated to inspiring people to achieve bottom-line results for sustainable change: Andrea works with entrepreneurs and business professionals from various fields, striving to find and fill the gaps of each practice entrusted to Ironstone's care. Email Andrea with your practice management questions: info@ironstonehq.com

One thought on “Passing The Torch – Succession Planning, Part I

  1. Pingback: PASSING THE TORCH – PART II Your Successful Succession Strategy   | IronstoneHQ

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