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What Are Most Wealth Management Firms Missing?

There is no playbook on how to find a successor with the right chemistry, availability and skills.

As advisors, we are trained to prepare our clients for their future. We help them visualize and then quantify ages, dates and dollar amounts for various goals and contingencies to project a future lifestyle to work toward together. It comes naturally to us to help coach and guide others through what can often be difficult conversations.

We send children to college, protect families from the death or disability of a loved one and ensure happy retirements without fear of running out of money. We educate the non-interested spouse and work with attorneys to ensure an estate plan is in place. We ask the sometimes-controversial questions about supporting a family member or affording unexpected healthcare costs. What do all these feats have in common? They are all about sustainability—of funds, of a financial plan and of peace of mind.

But there is one thing missing in many advisory teams: sustainability of their practice. Successful advisors come in many forms, and most are highly intelligent, empathetic and good communicators. Many, however, fail to do their own future planning. The fact is, only one-third of advisors have a succession plan in place. Oh, they’ve tried. They hired that intern once, and they left after being trained all summer. Or there was that mid-level advisor who decided to go back to school or left to work in their spouse’s business. It’s discouraging and there is no playbook on how to find a successor with the right chemistry, availability and skills.

Over the years, I have spent countless hours training interns and employees. And I have repeatedly been asked by other advisors how I possibly had the time to properly train so many people. My response to that is simply this: how can you not make the time? These people are the future of your business and the ones who will care for your clients when you are gone. If that’s not important, then I don’t know what is.

Three Succession Guiding Principles  

I recently successfully transitioned an advisory practice just shy of $500 million to a team I had spent over a decade partnering with and training—and getting ready for a workplace without me as their leader. How? With several guiding principles that helped this talented group prepare for their own roles as leaders, and stay in their seats on our team:

  1. I never met with a client alone. I always included two other teammates and gave them active roles in the meeting. The clients learned we had a team approach to client advance and service, and that there was a plan in place for my eventual succession. They also saw that I surrounded myself with some extremely capable young talent. I bragged about them openly … and the clients loved it.
  2. I supported additional training and education. I never denied a team member’s request to pay for additional professional designations and training. We ended up with CFPs, AIFs, and FPQPs, plus several notaries (who came in really handy when assisting with estate planning). The team even took advanced Excel classes together (their idea) to increase efficiency in marketing campaigns and other client communications. The increases in self-confidence of the team skyrocketed as more exams were passed and we celebrated together.
  3. I built a team. We annually set team goals and broke them out into behaviors so everyone knew what was expected. We regularly revisited these goals, and celebrated wins and recalibrated when we lagged. Everyone on the team was paid a salary plus a bonus based on the team’s performance. People were incentivized to work collaboratively and handle clients as a group. When a team member needed extra help or training, others naturally pitched in because it made the collective group stronger. This eliminated the “eat what you kill” mentality that exists in some practices. We also regularly participated in community service work of varying types, and we involved our clients as well. A recent career clothing drive for The University of Akron student interviews resulted in a record amount of clothing donated, only rivaled by a record number of closets being cleaned out. Talk about engagement! Not only did the team enjoy directly seeing the value of their efforts, but the clients loved that we were so involved in the community. Our team also enjoyed participating in races for client charities, both as runners and volunteers. They willingly participated even on weekends because they enjoyed each other’s company and loved working towards a common good cause.

All these efforts served to build a team that was bound together without egos or sharp elbows. This approach to client relationships gave all staff a seat at the table, an environment in which to grow together, and the opportunity to gain experience with clients in a supportive and collaborative fashion.

Rather than feeling threatened or fearing I’d be pushed out, when I decided it was time to take on new challenges, we conducted an orderly transition to the next generation of advisors in my practice. I was able to monetize my investment in the business and walk away with confidence that my long-time clients and friends would be well taken care of. I also left with the pride of having played a role in the careers of several rising star advisors. And it felt good to be able to look at everything I built and watch it carry on without me. Succession is not a dirty word or something to be feared. It’s OK to leave the party before you’re asked to leave. Embrace succession and the stimulating new opportunities for yourself – your clients and team will thank you.


Carina Diamond, MBA, CFP, AIF, is the founder and CEO of Stella Secunda, Latin for “Next Star,” which provides consultative organic growth strategies to a variety of companies in the financial services industry.

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