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This article appears in the March 2021 issue of Investment ExecutiveSubscribe to the print edition, read the digital edition or read the articles online.

“Coach’s Forum” is a place to ask your questions, tell your stories or give your opinions on any aspect of practice management. For each column, George selects the most interesting and relevant comments from readers and offers his advice. Our objective is to build a community of people with a common interest in making their financial advisory practices as effective as possible.

Advisor says: I was fortunate to have a talented young advisor join our team recently as a partner and future successor. She is a take-charge person with considerable insight into practice management.

This became evident when she asked to see my strategic plan for our business. I was embarrassed to admit I have never been much of a planner. In fact, having someone like her join our team is the most strategic I’ve been in my career.

I did offer her some projections of the revenue I thought the practice could generate once she became part of it. However, she said projections were part of a business plan, not a strategic plan. I have always thought of these plans as one and the same. What am I missing?

Coach says: First, congratulations on your new partnership. We work with a lot of financial advisors on their succession plans, and the No. 1 challenge many of them face is finding a good, qualified successor.

You are not alone in your lack of formal planning. I ask advisors for their business plans all the time, and their most common response is “It’s all in my head.” If they do give me something to look at, it is usually an Excel spreadsheet with some projections for revenue, new clients, etc. When I ask where the numbers came from, I hear things like “Well, it’s 10% more than I did last year.” Seldom is there any explanation of why or how they came up with those numbers.

Developing a plan at any level should begin with a clear vision of what you want your business to look like down the road. With that vision in mind, you can develop a strategic plan to achieve it, then create a business plan that describes the tactics you’ll use to implement your strategy. In more simple terms: vision determines strategy, which defines tactics.


Everyone characterizes what success means in their own way. I define “vision” as what your business will look and feel like when it is successful. Therefore, your vision statement should answer such questions as:

  • How big do I want my practice to become?
  • What role/responsibilities will I have?
  • What will my value proposition be?
  • What type of clients will I have?
  • What will the client experience look/feel like?
  • What will my team be like?
  • What level of service will I provide?

Strategic plan

Think of your strategic plan as your big-picture view of what you are trying to achieve with your business — the forest, not the trees.

Strategy tells us where we are headed and the boundaries within which we are going to operate. Strategy does not say, “Here’s what we must do next week“ or “Next year, we’ll add X number of new clients.” However, strategy might tell us: “To realize our vision, we need to add a new revenue stream” or “We want to be known as a financial planning-driven practice, not an investment-management firm.”

Typically, you will have only one core strategy at a time. For example, “to become the go-to firm in our market for small-business owners” or “to serve the needs of middle-income retirees” — but not both. Because your strategy is deep-rooted and based on your vision, it should be slow to change. Hopping from one strategy to another is inefficient and confusing to everyone around you.

Business plan

While your strategic plan is future-oriented and articulates what you want to achieve, your business plan focuses on the present and is all about the tactics you’ll use to achieve your vision. Tactics are the trees, not the forest, so to speak.

You typically will have only one core strategy, but your business plan will have several tactics for achieving that strategy, including:

  • A marketing plan detailing your products and services, branding, communications, promotional activities and pricing
  • A sales plan that outlines your sales objectives, pipeline management and sales process
  • A service plan describing your client service standards, segmentation and delivery process
  • An operations plan regarding your technology, systems and staffing
  • A financial plan covering your revenue, expenses and profitabilityUnlike your strategy, which should remain consistent, you can change the tactics detailed in your business plan — for example, your marketing or resources — if something is not working.

Succession plan versus exit plan

While we are on the subject of differentiating types of planning within your practice — and since your new partner will take over your business one day — you should also develop a plan for your eventual transition from the business.

We often use the terms “succession plan” and “exit plan” as if they mean the same thing. In my view, while they are based on the same event, they represent different perspectives.

I define a succession plan as what happens to the business once you are no longer there. An exit plan is what happens to you when the business is no longer there.

Your succession plan should be aligned with your successor’s strategic plan — i.e., where she wants to take the business. How the practice will function without you — i.e., marketing, sales, operations, etc. — will be part of your successor’s business plan. Even though you will be exiting the business, its continued viability and reputation will be important to your legacy (and possibly to your payout).

Within your personal exit plan, you should have a strategic plan that speaks to what you want from your retirement in terms of lifestyle, interests, relationships, etc., along with a tactical retirement plan that describes how you will spend your days and finance your lifestyle.

For good measure, you and your successor also should work out a transition plan that outlines how the transfer of management responsibility and equity within the business will occur, how long you will stay on to help retain clients, what your duties will be during that period and how you will be compensated, etc.

Continuity plan versus contingency plan

Let me throw in another example of different words that are often used to describe the same thing: “continuity” and “contingency” planning. I don’t believe there is an authority to differentiate between the two, but here is my take:

I think of a continuity plan as an agreement between two advisors to manage or take over each other’s business in the event of one person’s death or disability. This type of agreement requires more than a handshake.

In the scenario of an advisor’s death, the outcome is the sale of the business, so all the important considerations around that will come into play. A disability, on the other hand, presents different issues. Continuity agreements need a clear definition of what constitutes a disability, return-to-work provisions, responsibilities, authority, compensation, etc.

I view a contingency plan as more a disaster recovery plan for something such as a security breach, systems meltdown, fire in the office, etc. A contingency plan is more of an operational catastrophe than a human one.

Despite what I’ve said here, you do not need a truckload of plans for your business. In practice, plans are often related to each other, so you can complete more than one at a time. Your continuity plan, for example, could easily mature into your succession plan; your marketing expenditures are embodied in your financial plan; etc.

Be careful not to complicate the development processes, and bear in mind the old saying: “Plans are useless, but planning is indispensable.”

George Hartman is CEO of Market Logics Inc. in Toronto. Send questions and comments regarding this column to George’s practice-management videos can be viewed at