Succession planning in a team-based financial advisory practice can be a “hot button” topic, often leading staff to question their role in the business over the long-term.
However, it’s in your best interest as the owner of the business — and the best interest of your potential successor — to have strong employees stick around, says Ray Adamson, chief customer officer with BlueSun Inc. in Burlington, Ont.
Retaining team members has a significant impact on client retention during and after the transition. The key, then, is to ensure that your team members are fully equipped for what lies ahead.
Here are two ways to prepare your team for the succession process:
> Know when to start the conversation
Adamson recommends considering when and how you will break the news of a potential ownership transition. Weigh each team member’s role individually when deciding how early to bring them into the discussion.
Use discretion when informing assistants about the succession plan, Adamson says. Your decision will depend partly on whether your assistant is equipped to help you find a successor.
“The thought of selling the business might have an impact on [assistants] in the short-term,” Adamson says, “from a productivity perspective and just from an emotional perspective.”
Associate advisors, on the other hand, should be informed early on, preferably during the hiring process, so they can position themselves to become the natural successor. Making a transition internally typically provides the best value for both the advisor and the associate, Adamson says.
If an associate can’t afford to make the purchase, you should remain transparent in your search for an external successor. Keep associates in the loop as the search progresses.
> Clarify individual roles
The thought of changing ownership can be unsettling for team members.
“There is always that [feeling of] discomfort if team members don’t know where all the pieces are going to fall once everything goes through,” Adamson says.
The more information team members receive about your plans and the transition process, the more comfortable they are likely to feel about their future with the firm. Spell out your team members’ roles, Adamson says, both in the present and in the future.
“It’s not necessarily about changing anything,” Adamson says. The key, he says, is clarifying what is expected of those team members.
This is the first part in a two-part series on preparing your team for succession.
Next: Easing your team into the transition process.
For more, see the Succeeding at Succession special feature.