Here’s some timely advice from Allen Taylor, the president-elect of the Oakville, Ont.-based Canadian Association of Family Enterprise.

At a recent seminar in Toronto, he noted that about 70%-90% of global gross domestic product is derived from family businesses. As the baby boomers that own those businesses begin to retire in great numbers over the next few years, there’s going to be a huge shift in wealth and control of these businesses. In turn, that is likely to create a soaring demand for expert advice regarding the many intricacies of the succession-planning process.

Taylor rightly points out that a lack of planning around the financial, legal and operational factors associated with transferring a family business from one generation to another can create a thicket of legal and family problems.

Indeed, Sean Lawler, a partner with law firm Shibley Righton LLP in Toronto, agrees that thorough planning will be crucial. “It’s important to advise clients to take the time to deal with the details of the transition early on,” he says, “while everyone is still engaged in the business.”

Taylor suggests that financial advisors need to brush up on succession-planning issues that can arise in family businesses in order to do the most effective job.

This is great information for financial advisors — in more ways than one. Yes, succession planning, an important source of business in many practices, is about to get even bigger as the baby boomers hang up their spurs. But many advisors should take what these experts say a little more personally.

According to the 2009 Advisor Survey by Desjardins Financial Security, in partnership with Investment Executive, some 76% of advisors have not taken the time to put together a written succession plan for their own practices.

Given that the average age of the advi-sors in the survey was 50, you might expect that percentage to be quite a bit higher. As George Hartman, president and CEO of Market Logics Inc. of Toronto, points out on page 1 in this issue, this is a classic case of the “shoemaker’s children.” Many advi-sors, he says, are wrapped up in their hectic daily business lives, and apparently give little thought to the longer-range, strategic issues concerning their own businesses.

You can hardly expect that young advisors in the first few years of building their practices would have formalized a succession plan. But as an advisor gets closer to retirement, succession planning should begin in earnest. When should this start? Perhaps five to 10 years before the anticipated retirement age.

Why? Doing it closer to retirement may lead to unanticipated difficulties, including getting full value for the book of business, as well as unnecessary disruptions in the advi-sors’ client relationships.

The Desjardins/IE survey tells us many other interesting things about advisors. Most respondents said their level of stress — created in part by their concern for their clients’ well-being — is either the same or lower than it was a year ago. However, 15% said their stress level is higher, and these advi-sors have changed their work habits to cope. For instance, some appear to be delegating more tasks to support staff and other colleagues, while others say they have reduced the amount of time in their schedule that they allot to clients.

Depending on how an advisor runs his or her practice, this latter technique might not be good news. Also in the not-so-good category, a slight majority of advisors said their clients have less confidence in financial institutions than they did a year ago.

In the next two issues of IE, we’ll explore more results from the survey. So, please stay tuned. Tracy LeMay, Editor