Most financial advisors do not, as a rule, plan for their eventual exit from the their practice.

“They know they should plan their succession,” says George Hartman, CEO of Market Logics Inc. in Toronto. “But they do not do a good enough job of it.”

Many retiring advisors find that the day of reckoning “simply creeps up on them,” says Heather Holjevac, a certified financial planner with TriDelta Financial Partners in Oakville, Ont. “They’re left with insufficient time to properly transfer their practice into new hands.”

Like the children of divorce, it is the clients — who had been looking forward to a lifetime commitment from their advisors — who suffer the most.

“It’s cold to suddenly leave,” Holjevac says. “Clients can become upset.”

To ensure your business — and your clients — are well managed when it’s time for you to retire, follow these key succession-planning steps:

1. Set clear goals
Determine your objectives far in advance of your retirement date.

“Usually three to five years is an appropriate time frame,” Hartman suggests.

In planning for succession, Holjevac says, you should work backwards, based on a proposed transition date, to make a handover to your trusted partners.

2. Identify and develop a successor
You should choose and mentor a partner as your eventual successor. “The candidate should share your values, philosophy, outlook and client goals,” Holjevac says.

“Look at individual strengths and personality,” Hartman says. “A practice does not have as much value without the advisor who built it.”

So, your goal should be to find a successor who can best ensure your business retains its value.

Finding an ideal candidate within your practice will help ensure the sustainability of the practice. Such a proposition will enable you to offer the candidate security, Holjevac says.

3. Ensure a smooth transition
“The transition process must be seamless,” Holjevac says, “without any meaningful impact on clients.”

Your goal should be to “ensure your clients will be in good hands,” Hartman says.

During the transition period, Holjevac says, focus on introducing your clients to your proposed successor, so that when the handover takes place, clients will not experience any unexpected change.

If you do not plan ahead, she warns, clients may decide to leave, especially if your departure catches them by surprise: “You want to make them happy and comfortable.”

4. Find the right balance
Many advisors are emotionally attached to the businesses they have built, which makes it difficult for them to put a succession plan in place.

“You have to find the right balance between your retirement goals and what is good for the business,” Hartman says. You must have a well thought out plan with a clearly articulated vision prior to deciding on succession, he adds.

For instance: are you looking to maximize the returns on the investment you’ve made? Are you looking to build a multi-generational business? The decisions you make should benefit both your personal life and your business.