Just as a well-crafted financial plan can set your clients’ minds at ease, finding the right successor for your business can provide peace of mind for you.
Your business is your life’s work, says George Hartman, CEO of Toronto-based Market Logics Inc., and when you retire it will be your legacy. You will want your clients to be well served and your reputation to remain intact after you retire.
Perhaps your biggest challenge before you retire is to find the right candidate to take over your business — someone who shares your values, will maintain the integrity of your practice and will provide the service your clients expect.
Give yourself two to three years to find the right person. Start by creating a description of the ideal successor and then start researching candidates.
Once you know your ideal candidate’s profile, how do you find him or her? Follow these suggestions on where to look for a successor:
> Ask around the office
Tell your colleagues and management that you are looking for a successor.
“It’s like marketing anything else,” Hartman says. “You’ve got to get the message out. Once you start to tell [others] that you’re looking for a successor, people tend to come forward.”
> Look across the street
Put the word out to your competitors that you are looking for a successor.
It’s not that you want to encourage advisors to move from one dealer or firm to another, Hartman says. But it is not uncommon for advisors from different companies to come together, and the practice may become more frequent.
> Speak with wholesalers
Let wholesalers know that you are looking for a successor.
Wholesalers from fund companies and insurance companies are excellent sources of information about what’s going on in the industry at the advisor level. They deal with advisors from various firms every day, says April-Lynn Levitt, a coach with The Personal Coach in Calgary, so they would know if there is an advisor on their client list who runs a business similar to yours. Or they might hear of a suitable candidate from someone else.
> Spread the word at conferences
Ask around about possible candidates the next time you are at an industry event.
One of Levitt’s clients, for example, found a successor through a conversation at an Advocis meeting.
“Just like when you’re hiring an employee,” Levitt says, “you start talking to everyone.”
> Use caution when considering relatives
Family members can make excellent candidates for a succession plan, but you have to be careful.
“Just because they’re family doesn’t make them the best fit,” Hartman says. “In fact, sometimes being family makes them the worst fit.”
You must evaluate the family member on the same basis as any other candidate.
> Go online
Use the Internet to find the right match for your business.
Online services such as Advisor Alliance Canada (www.advisoralliancecanada.ca), can help you find a buyer for your business.
You can list your business free of charge on Advisor Alliance after signing up for a “free member” account. A full-membership account allows you to send messages to potential candidates via the website. Fees range from $99 to $199, depending on the package you choose.
This is the second of a three-part series on succession planning. Next: Evaluating your business.