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Practice Planning

Finding a (Female) Successor

Beth Blecker, 62, wants to find a female advisor to join her 20-year-old financial planning firm and hopefully take her place when Blecker retires, ideally in about seven to eight years.

Blecker's Eastern Planning firm has three employees in Pearl River, N.Y., and about $200 million in assets. It's been growing at 5 to 10 percent in revenue annually. Her specialty is financial planning and her son, Matthew, who signed on in 2001, is the chief investment officer. “I'm the compassionate one, he's the analytical one,” she says. She also brings in new business, mostly through client referrals.

But that clear distinction also means Blecker's son can't fill her shoes when she retires from the firm. She wants to find another advisor who is female, with a strong financial planning background, to join the practice and eventually take over the financial planning part of the operation.

Blecker attended a conference for women advisors held by Royal Alliance, her broker/dealer, last year. She didn't find anyone who fit the bill—an advisor who wants to enter an established practice with well-developed processes and is willing to move, if necessary. She got a list from Royal Alliance of about 100 advisors interested but not yet affiliated with the firm.

Compensation for the new partner depends on the new arrival's experience level. If it's someone who comes with an established book, she would continue to get a percentage of that business; when she started working with clients of the firm, she would receive a portion of those revenues, as well. Eventually, she would get an equity stake. 

How should she move forward? Our panel of experts gave the following advice:

Brandon Odell
Director of Business Consulting

The Ensemble Practice

I don't think she should start by requiring the person be female. I‘m wary of her narrowing down her options before she's begun.

If compassion is important, then she needs to make that a central part of the interview process. That means posing different scenarios and asking how candidates would handle them. She'd ask follow-up questions based on the answer and see where they go with it. She's assessing how they think and the level of compassion they display.

She also has to think about her value proposition. Recruiting, after all, is a courtship. That's where the processes and procedures might help, especially if she also has a CIO. But she can't just say she has processes. She has to sell it.

Daniel Finley

Advisor Solutions

There are three possible plans. The most preferable is to go through that list of 100 candidates from Royal Alliance to see who best fits the demographic she‘s interested in—women between the ages of 35 and 50. Before contacting them, she'd map out exactly what she's going to say: who she is, the reason for the call and an invitation to schedule a lunch. Then she has to map out the things she wants to discuss during the meeting. After that, she'd narrow the list down to three finalists.

Plan B would be to look from within. Do any of her employees fit the demographic and seem like they'd be suited to the new role? The advantage is that clients may already know the person.

Plan C is to look at industries such as insurance. She'd need to teach that person how to do the financial planning side, but it could work, as long as the individual is open to learning and has the right personality.

Matt Lynch
Managing Partner
Strategy & Resources

Trying to find a person to step into your exact role is a classic problem in a lot of advisor succession plans. If she wants someone who will be ready in five to eight years to take over, that person is already pretty successful and she's got to be able to offer something really attractive. Plus, anyone of any quality will want an equity stake up front. But the likelihood of finding someone who will grow into her role in the necessary period of time and get it right the first go around isn't great.

Most firms have processes, so it might not help her stand out. These days, a lot of smaller practices either have a relationship with a b/d that provides a lot of practice management tools or they leverage their custodian's technology.

For all these reasons, my feeling is she should consider merging with a larger firm, instead of trying to find a needle in a haystack.

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