There is a dangerous trend taking root in the industry and it threatens the future of our practices.
When I see something that I know isn’t right once, I usually just chalk it up to a bad apple. When I see two or three instances, I start to recognize a trend. I recently had this trend confirmed by an industry leading recruiter.
Next generation advisors are being led on at an alarming rate.
The story goes something like this: "Join our practice as a junior advisor...you won’t get paid much but in a couple of years, you can buy the book and the future is yours."
Before you know it, a couple of years becomes five; then it becomes indefinite.
Sometimes the senior advisor decides that with the additional help, they don’t need to retire.
Sometimes a family member decides to join the practice and the whole scheme is upended.
Are you like me- Have you heard some version of this story a half dozen times?
Sometimes the advisor sticks around afraid to waste the years they have already invested.
Sometimes they jump ship or leave the industry completely.
Naturally, they end up disgruntled and jaded by the unending broken promises.
We are at this pivot point in the industry where the older generation will be leaving the business one way or another. We talking about succession planning at every industry conference; yet, very little is happening.
Senior advisors often feel like the next generation has to “pay their dues.” They often expect something just short of indentured servitude for the opportunity to possibly, someday, buy the business.
The juniors, understandably, are getting skeptical that the senior advisors will follow through with their plans. They are the ones who have sacrificed valuable years building someone else’s business.
We have to demand of ourselves and others that we keep our promises to the next generation of advisors. We may think we have valuable practices, but they won’t be worth much if there is no one to buy them.
Here are a couple of things to consider if you are part of a succession arrangement:
Set a realistic timeline and commit to it. “Someday” is not specific enough.
Get it in writing. Handshakes are lovely, but not in business.
Review the plan annually to assess progress. Keep talking!
Build in financial repercussions for failure to execute. Hearing the word “Sorry” won’t compensate you for losses.
Always think of the clients. Dying with your boots on is a betrayal!
I know that finding the right successor for your business isn’t easy, but if you are over 55 without a plan, you are doing your clients a huge disservice!
We, as an industry, need to do a better job of creating succession plans and sticking to them! This might involve taking a risk on yet-to-be-proven talent. If we don’t the impact will be a generation of jaded advisors who aren’t willing to take a risk on us!
Do you have a story? Have you been the junior on the never-ending treadmill waiting for a senior to retire? Are you a senior that is a tad too comfy to take serious steps toward a viable succession plan?
I would love to hear from you! Consider sharing your story with us in the TIA Mastermind Group on Facebook!