Imagine yourself in retirement. Maybe you’re sailing off the Amalfi Coast, visiting family in Albuquerque, or on the links with your buddies. Or maybe you’re consulting part time, helping a young advisor get to know your favorite clients.
Either way, you need a plan. How will you set yourself up for a happy, fulfilling retirement?
Since 2018, Raymond James has been surveying retired advisors to gauge their happiness and learn what factors influenced their answers. One common theme that emerges year after year is how essential succession planning is to satisfaction in retirement.
Among the former advisors surveyed, here are three actions they say prepared them.
“Go create a plan” can sound intimidating, but it doesn’t have to be – especially if you’re looking 10 or more years down the road. In the survey, 65 percent of advisors said simply identifying a successor was key.
If you don’t have a built-in successor, there are a couple of ways to find the right one. The first is by surveying your personal network of advisors. Who do you know who could be a good fit for your clients? You may need to interview multiple advisors before finding your successor, but the effort will be worth it once you’ve found the one you feel comfortable passing your clients to.
Another way to identify a best-fit successor is by engaging with your firm’s management and soliciting their help to find a suitable match based on their knowledge of you and other advisors they’ve worked with.
A third option is to leverage a tech solution. At Raymond James, advisors can log into the Practice Exchange platform and input attributes they’re looking for in a buyer (or a seller, for that matter), and the matching algorithm pairs them with potential successors that they can reach out to.
Relationships are a primary focus during succession planning, just as they have been throughout your career as a financial advisor. Successful succession planning means keeping clients informed: Nearly 3 out of 4 (74 percent) of survey respondents identified communicating with clients as a top factor in preparing for their retirement.
There’s a lot of anxiety associated with these discussions, which is one reason advisors sometimes wait too long. How will your clients perceive the news? How can you reassure them you’re still committed to their financial goals? But it’s important to have open and timely conversations with your clients – the more frequent and early, the better – even if it’s just to tell them you have a plan, so they know that if something happens to you, they will be taken care of.
It’s natural to be reluctant to start these conversations, but it’s essential to give your clients the opportunity to say goodbye and meet their new advisor, whether it’s with a retirement party or a simple phone call.
Mental and psychological preparation is another critical step toward retirement for more than a third of survey respondents. It’s important for advisors to plan for their next stage – for example, if they’re going to stay on for a period of time to transition their book, then move into a coaching or consulting role.
It can be extremely helpful to be able to talk to clients about your plan and to be available to your succeeding advisor, who may still have a lot to learn. Retiring advisors tend to have a wealth of experience and knowledge that isn’t written down: You may have been through market downturns, the tech crash, or the housing crash, and you just know how to help clients through it – younger advisors may need to lean on you in unexpected or unique situations.
Also keep your sights on the fact that a succession means your retirement. You’ll want to consider what that leisure time looks like, whether it’s spending time with family, golfing, traveling or something else. Find what makes you happy and go all in – you’ve earned it.
The bottom line? Planning is key to a happy retirement. And whether you plan to maintain relationships with your clients and successor (as 66 percent of survey respondents do) or sail off into the sunset, whether you’re five years away or 20, it’s never too early to start.
Robert Goff is vice president of succession and acquisition planning at Raymond James.
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