The Question No One Ever Asks Their Financial Advisor, but Everyone Should

IMG_7379I was 29 when I became a financial advisor. Back then I often sat across the table from prospects who were about retirement age at the time.

I remember a woman telling her husband, “Well, if we hire him at least we won’t have to worry about him retiring before we do”.

These days, having your financial advisor retire before you do is a real possibility. According to information published by Cerulli Associates, the average age of a financial advisor is 51. 43% are older than 55. And approximately one advisor in 5 is over the age of 60.

Like many other industries, people working in financial services can see the light of retirement at the end of the tunnel. Soon many of us will cross the bridge into retirement even as we advise our clients on theirs.

The question no one ever asks their financial advisor is this: “When you retire, what is your plan for your business?” Or more to the point, “When you are playing shuffle board in Sun City who is going to be watching over my accounts?”

You can’t work forever. Many financial advisors claim they will never retire, but the truth is they won’t be able to work forever. Like you, your advisor will eventually be forced – by choice or by circumstance — out of the workplace.

According to a study by Accenture, Advisor Succession Planning: Managing the Retirement of Baby Boomer Advisors more than half of the nations 316,000 financial advisors may exit the business in the next 10 years.

What happens when your advisor isn’t around? What happens when he or she leaves the business, retires or gets hit by the proverbial bus?

Then what?

The non-plan plan. Unfortunately, the Accenture study also found that 71% of advisors have no succession plan at all. For most advisors simply walking away is the only plan they have.

It’s the non-plan plan. These advisors not only risk losing relationships they’ve spent years building, but their clients are often left behind without an advisor at a time when they need one most.

It takes a village – of sorts. The best advisors have a succession plan for their business in place. Typically, this includes merging practices with other advisors or selling out to the highest bidder. And then walking away.

Another option is to build a self-managing team — a team of people that includes everyone from highly skilled administrative support staff to experienced and knowledgeable advisors that can meet the needs of a diverse and growing client base.

This team would share a common vision, values and commitment to their clients that made the team and their clients successful in the first place. More importantly, the team has a long relationship with their clients and would be able to meet their needs whether the financial advisor – or anyone else on the team – was out of the office for a day, a week, or forever.

What’s my plan? If you are a client of mine, you may be wondering what I plan to do.

My kids are just wrapping up 5th and 7th grades. As long as I have bills to pay, I will want to work. So I don’t plan to retire for another 12 years or so, maybe longer if things go well. I have time on my side.

I also have the resources to be able to reinvest back into my business. While I always max out my retirement plan and invest in the same investments I recommend for my clients, I feel that one of my best investments is to invest in my business.

However, I don’t want to work forever. I also don’t want to work all the time. After nearly 25 years in the same job, I enjoy my time off. But client needs are 24/7. They deserve to be well taken care of if I am out of the office for a day, a week, or as I said above, forever.

That’s why I am building a team. I feel that a team approach is the best way to ensure a seamless continuity of values, service and leadership to my clients – whether I am here or not.

It’s also the reason why I spend time and money in programs like Strategic Coach where they teach entrepreneurs how to create a “self-managing company” so the business carries on, even if you do not.

A work in progress. If you have ever had your annual review scheduled by Kristine, paperwork or service issue handled by Jean or been to an event planned by Katey, you have already been a beneficiary of this team approach.

In the future, I plan to increase staff hours and even add other licensed planners. I will also continue to invest in technology, training and other tools to help my team help you.

Building a team requires time and money and hard choices. But I think you are worth it.

And that’s my plan.