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Succession Planning Is Not About You. It's About Your Clients.

Succession Planning Is Not About You. It's About Your Clients.

Succession planning is not a fun topic for many advisors. For most of us, it is very difficult to discuss leaving the practices that we have spent much of our lives working tirelessly to build. It is hard to imagine stepping back from the thing that occupies our time, our focus and our passion nearly every day.

The truth of the matter, however, is that succession planning is not just about the advisor; it’s about the clients. As advisors, we care about our clients’ well-being. We strive to have relationship-centric businesses, and it’s hard to find success without a high level of commitment to your clients, their families and their plans for the future. A crucial part of that commitment is a succession plan, as uncomfortable as the thought of retirement might be. Advisors owe it to their clients to ensure that their hard-earned money and their well-developed financial plans will be secure, no matter what happens.

Ideally, succession planning should be a decades-long process. At 52 years old, I am already well into a succession plan, even though I don’t plan to retire for another 20 years. Financial planning is highly personal and clients put an immense amount of trust in their advisors. For that reason, continuity is extremely important. Clients need time to get to know the people they will trust with their finances when their financial advisor is gone.

After all the time and work that I have put in to building my business, the last thing I want is for it to fall apart after I retire. Building a succession plan that will result in a practice that continues to grow and make me proud long after I retire requires putting it into action many years before retirement. Unfortunately, I have seen too many advisors walk away from new business because they do not have the support that they need. I have also seen advisors forced to sell their practices at well below the value that they had hoped for and worked so hard to build because they waited too long to begin their exit plan. A succession plan that spans decades is a better situation for my clients, my successors and me.

Several years ago, a group of other Lincoln Financial Network advisors and I established that succession planning was a big concern for all of us, and that the entry-level employees we were bringing on were not getting the necessary training to work with us on fee-based financial planning. So, we worked together to develop Gen2, a recruitment and succession planning initiative that connects select new advisors with established advisors and offers training, networking and support to those promising young advisors.

The two young advisors in my practice, Mike and Valerie, have been active in Gen2. Through this program and their experience as para-planners in my practice, Mike and Valerie have become trusted partners in my business, despite being under 30.

For the most part, I’m an old-fashioned advisor. And like most independent advisors, my practice is incredibly important and personal to me. For a long time, choosing a trusted successor felt like an insurmountable task. Essentially, I did not understand the value that bringing millennials into my practice would have until Valerie and Mike joined and brought their unique perspectives, talents and approaches.

Now, thanks to the contributions of my millennial colleagues, my practice utilizes more technology and more data. Our comprehensive financial planning process and many of our internal practice management tasks are now more streamlined. Millennial employees bring a different perspective to my practice that I did not know we were missing. Importantly, they have the capacity and the know how to work with younger investors who would not have been a fit for my practice before. I hate turning away clients. Expanding my team to include younger advisors has allowed me to grow the client base of my practice in different directions, welcoming those younger clients who are not in my market but who can benefit from the financial planning done at my practice.

Despite what many sensational headlines might suggest, not all millennials are unmotivated and self-centered. I have been immensely pleased to find that my two successors fit seamlessly into the culture of my firm: hardworking, trustworthy, diligent and thoughtful. In truth, there are many young advisors who enter the business and expect things to be handed to them. Every successful advisor knows that simply does not work in financial planning. I encourage older advisors not to settle for a successor that is not a fit because of a stigma that all millennials are not up to par. It may be further motivation to begin thinking about your succession plan early and often, but millennials who can handle the demands of financial advice are out there and are eager to learn from established advisors.

Recruiting millennials does not mean changing everything about your practice. It may, however, mean being open to new ideas and technology. Millennials are not afraid of working hard and following the rules, but they do value employers who listen to them and incorporate their input where possible.


Mike Lockwood is a registered representative of Lincoln Financial Advisors Corp., a broker-dealer (member SIPC) and registered investment advisor. 

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