Advisers need to practice what they preach
My buddy Frankie Sorrentino earned his living as a general contractor and licensed electrician. He was serious about…
My buddy Frankie Sorrentino earned his living as a general contractor and licensed electrician. He was serious about his work and always talked about developments in electrical standards and energy efficiency with friends and family.
Ironically, before he could sell his house and retire to Florida, he had to hire someone else to handle the necessary electrical upgrades and modifications that he had neglected to make. He explained that he was so busy working on other people’s homes over the years that he never found the time to fix his own.
Frankie sounds a lot like many financial advisers I know who are so busy doing right by clients that they neglect putting their own houses in order.
Specifically, I’m talking about succession planning.
Far too many financial planners and advisers, who spend most of their day wrapped up in their clients’ goals and dreams, don’t spend any time actively planning their own future.
From personal conversations I have had with many advisers, it’s easy to deduce that succession planning is almost too sensitive a subject for them to deal with. Besides the serious and complex financial elements at play, the subject is fraught with emotional and philosophical issues.
As a result, many advisers simply push the issue of succession planning — and even the less problematic question of contingency planning — right off the table. They simply don’t want to think or talk about what comes next.
Frankly, I don’t get it. Financial planners and advisers are part of a profession that advocates long-term planning for their clients. They preach the gospel of spreading risks and weighing contingencies.
They are often the only ones willing to tackle delicate issues such as long-term-care insurance or disability coverage, and they deal constantly with the need to make sure that their clients don’t outlive their money.
And yet when it comes to their own businesses, these same savvy professionals do nothing.
I believe that most advisers know in their gut that having a succession plan is important. After all, advisers who warn clients to plan ahead surely must believe that they need their own long-term succession plan or short-term continuity plan that will kick into place and protect their families, their businesses and their clients if anything unexpected arises.
Advisers know this, of course, but I bet most procrastinate doing the necessary work because they feel no sense of urgency.
It is, however, time to face facts. The average age of an adviser is somewhere in the mid-50s. If that less-than-fresh face staring you in the mirror every morning isn’t a call to urgency, what is?
Since most experts estimate that it can take from five to 10 years to put a succession plan in place and groom a successor, the time to get started is now.
You’ve read those industry reports, too. You know you need a plan. So what are you waiting for?
Jim Pavia is the editor of InvestmentNews
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