Plan your exit as you enter
Succession planning should start the day a planner opens the doors for business, says Garvan Financial Planning general manger Greg Miller.
But to attract the right person, the planner must consider issues such as equity in the business and a career path for their successor, Miller told a recent FPA Melbourne Chapter lunch.
“To increase the value of the business, the planner needs to delegate and allow themselves to do what they are best at,” he says.
This means if somebody else is better at running the business, make them chief executive officer and allow the planner to concentrate on the planningside of the business.
Miller says the successful business needs process and systems, with the correct support staff backing-up the planners. A successor to the business might show more flair running this side of the business.
However, if a successor has potential planning strengths, the existing adviser should let them work on some of the good clients, rather than just burdening them with all the bad clients, hoping they will turn them around.
“A client services manager (CSM) is a key role in succession planning,” Miller says. “A CSM is someone who wants to make a start in the financial planning business.”
These managers can start by taking notes at client meetings and leave the financial planner to talk about strategies and working towards making the second appointment, Miller says.
Subsequent appointments will see the CSM following through the process.
“A principal should consider their next appointment is going to be a CSM with a career path and equity in the business,” he says.
“Equity is the key to attracting good people, but planners should be prepared to pay more to get a better candidate.”
The career path might be hard to offer for someone working in a small practice, Miller admits, but without it, the good candidates will head for the larger firms that offer a structured career path.
“In the future, people will be the chief executive officer, rather than the owner/planner,” he says.
“To put in a successful succession plan, a planner has to tackle some of these issues. Done properly it will lead to growth of the business.”
AUTHOR
Lachlan Gilbert
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