The Fact: Fewer than 10% of advisors said they had a formal, written succession plan, in a recent industry study.

The Implications: While advisors focus substantial effort on building and managing a business, their ability to extract value from that business is being called into question. Many industry experts suggest that selling the practice to a partner is one of the few paths to a successful exit strategy. Today, too few advisors are thinking through the issue of the future and this may have a real impact on their own retirement plans.

The Idea: Advisors should put a formal succession plan in place at least five years before retirement and ideally before than time. That plan should identify the target of the sale and include a plan to ensure that financial statements are complete, a process to assess the value of existing clients, a plan to gather client feedback and a defined process to transfer the book of business in a way that will ensure maximum retention. Retention and opportunity are the key drivers of the value of the business so the onus is on the seller to ensure that these two elements are defined and quantified.

The Next Step: The Business Success Kit provides you with the tips, tools and templates that you’ll need to enhance practice productivity and profitability. It’s the most practical and comprehensive guidebook available for financial advisors. For more information, visit www.AdvocisStore.ca and click on the Business Success Kit.