Succession Plan – Do You Have One?

At The Annuity Consultants, we are PASSIONATE about helping business owners (you are more than just a producer) take the steps to get your succession plan in motion.  What are you going to do?

• Pass your business off to your kids?
• Transfer ownership to someone else in your firm?
• Merge with another firm?
• Sell your book of business?
• Just let your business disappear?

Here are so top pros and cons to consider when you start your planning.

Pass Your Business Off To Your Kid(s) or An Internal Successor

The Pros

• Your current client base may already know your children and/or a junior advisor that works within your firm.
• You get to make the choice on the best fit for your business.
• You may have the opportunity to continue in the business in a reduced role.

The Cons

• You may HAVE TO continue in the business in a reduced role.
• Determining the best choice for your successor is challenging. It may create tension with family and/or employees.
• What if none of your children or existing junior advisors/staff are what you want for your business?
• Depending on the economics of the plan, younger successors often lack the capital to fund the plan.

Merge Your Business With Another Financial Services Firm

The Pros

• Your current client base will immediately have access to an established advisor/team.
• Based on your plan, you may get immediate funds and/or a stream of income to use for your retirement.
• Based on the increased production of a larger firm, the firm may qualify for larger commissions/fees that would grow the business.

The Cons

• You have spent years crafting your business. Are you able to fully let it go?
• What if your clients now suffer from a low level of customer service when they have been receiving high levels?
• If the philosophies and strategies differ from your own, how will that impact the retirement plans that you have put into place for your clients?
• Not all offices run the same. You risk sever downtime trying to merge systems.
• With any type of change, there is a very high risk of attrition.

Sell Your Business

The Pros

• The potential for a large lump sum payment to fund your retirement.
• The potential to finance the sale with a decent lump sum up front and then payments with interest.

The Cons

• You have spent years crafting your business. Are you able to fully let it go?
• What if your clients now suffer from a low level of customer service when they have been receiving high levels?
• If the philosophies and strategies differ from your own, how will that impact the retirement plans that you have put into place for your clients?
• Not all offices run the same. You risk sever downtime trying to merge systems.
• With any type of change, there is a very high risk of attrition.

 

Are there other pros and/or cons that should be on our top list?  Tell us about it!  CONTACT US