In last week’s blog, we discussed the importance of succession planning for financial advisors and why we’re planning ahead for our clients’ future. This week, we’ll discuss the succession planning crisis, both within in the financial services world and for families.
Despite its importance, most advisors do not have a succession plan. SEI Advisor Network research shows that around 32% of advisors claim to have a succession plan, but only 17% — or, on average, one in five advisors — has a binding and actionable succession plan in place.
The question many people have is, “Why don’t financial advisors have a succession plan in place?” Perhaps the most obvious reason is a lack of time. Advisors focus so much on building their businesses and taking care of their clients that they haven’t thought about the future, whether that’s five, ten, or twenty years down the road. Another reason is that many advisors are uncomfortable thinking about their business continuing without them. Succession planning means that they won’t be the one running their firm someday and, for some, it’s a difficult thought.
The same could be said as for why so many families don’t have a family succession plan. Too often, we’re so focused on the here and now that we don’t have the time (or we don’t make the time) to plan for the future of our business or family’s legacy.
Does your financial plan include a succession plan? Do you know if your advisor has a succession plan? For many, the answer is likely “no.” We challenge you, as an investor, to ask yourself two questions:
- If I didn’t wake up tomorrow, would I trust my advisor to continue managing my family’s assets?
What would happen to your family or business should the worst happen? Are your finances in order and is your spouse or loved ones aware of the location of your many accounts? Are your insurance policies up-to-date? Everyone wants to ensure a smooth transition of their estate to their family. A strategic plan is necessary to help make this happen.
- If my advisor didn’t wake up tomorrow, would I trust his or her firm to continue managing my family’s assets?
If your advisor unexpectedly fell ill or died, do you know who would take over the management of your accounts? Are your comfortable with that advisor and do you feel he or she is familiar enough with your family’s circumstances? After building up a close relationship with your advisor, you ideally want to continue to have a trusted relationship with another advisor.
If you feel uncertain about either of these questions, it’s time to talk to your advisor about his or her succession plan, as well as your own. Your advisor should be open to discussing their plan for their clients’ future. At Nobile Hinchey Private Wealth Management, we’ve embraced succession planning and want to maintain a high level of transparency with our clients when it comes to our future. You deserve to feel confident in the continued management of your wealth.
A succession plan isn’t just for advisors to plan for their future retirement; a succession plan is designed to help protect and ensure that your needs are met and will continue to be met when your advisor retires or if the unexpected should happen. Similarly, a succession plan for your family can help protect your loved ones in the future should the unexpected happen to you.
Would you like to discuss succession planning? We’re happy to meet and chat. This is a great opportunity to discuss the future of your assets and how Nobile Hinchey Private Wealth Management can assist your children and heirs with the continued management of the wealth and legacy you wish to leave. You can reach out to us by email at [email protected], or call our office at (860) 659-5977.