I told clients they need a plan. Turns out, I needed one, too.
By Pat Hinds, Founder of Granite Financial
I’ve always felt most rewarded, personally and professionally, when I’ve set a goal, mapped out a plan to reach it and seen that plan through to success. That’s why my 26-year career as a financial advisor has been so fulfilling.
Over the years, as the plans I developed with clients came to fruition and my business grew, it became clear I needed a plan for my own future. Although it was difficult, I had to face the reality that one day I would have to step away from Granite Financial, the practice I’d built from the ground up.
Most successful entrepreneurs find it painful to imagine handing the keys to their business over to someone else. It’s easier to focus on the present. But as financial advisors, that mindset runs contrary to the advice we give clients every day.
When it came to planning for the future of my practice, I had two distinct advantages over many of my colleagues. First, my broker-dealer, Securities America, makes continuity and succession planning a high priority and offers an assortment of helpful resources for developing plans. Also, my daughter, Laurie Humphrey, had shown an interest in financial planning from an early age.
While I never pushed her down that career path, I hoped Laurie would follow me into the industry and eventually take over the practice. She was introduced to the business during her college years when she worked in my office. After graduation, she went her own way and specialized in long-term care insurance before rejoining me at Granite Financial in 2006.
At that time, we didn’t have a detailed succession plan specifying when and how she would take my place. In fact, I’d hired another advisor to take over the business if Laurie chose not to. I had a professional business analysis performed. After it was determined that Laurie would buy the business we had to work on payment options. I wanted her to be able to take over the business without it being a financial burden. We involved our attorney and CPA in helping us work out the details.
But shortly after Laurie joined me, I suffered a major medical incident, and Laurie made the choice to purchase the business.
It was such a relief to know my daughter would step into my shoes and take care of my clients in much the same way I had. Laurie had frequently participated in client meetings, so my clients knew her and felt comfortable working with her. Even before she was licensed, some clients said they hoped she would eventually manage their accounts. Once she had her license, she was running the meetings, and I was there only for public-relations purposes.
By the time I gave up control of day-to-day operations, clients no longer turned to me during the meetings. They focused on Laurie. That’s when I knew we’d made a smooth transition.
I had no doubt the practice was in capable hands and never felt the need to ask Laurie to do things differently. But it took a long time to overcome a persistent desire to remain involved.
Laurie and I still talk almost every day. Occasionally, she asks for my advice. But most of the time, I’m just a sympathetic ear or sounding board for her ideas. As I move into a new stage of life and look to the future, I’m excited that Laurie’s 12-year-old daughter, Samantha, is already showing a keen interest in financial services and has ambitions of following in her mom’s footsteps one day.
I’ve learned a lot over the course of this amazing journey from startup to retirement. But the most important lesson was one I’d shared with clients for years: No matter where you are in your career – just starting out, looking ahead to the future or nearing the finish line – you need a plan.
Life is short, and you never know what will be thrown at you. To go forward without a plan can put your family, your employees and your clients in a tough situation. You owe it to them to get started on your continuity and succession plan today.
- I had a professional business analysis performed. Laurie might have the company ‘s name, I cannot remember and don’t have that information available to me at this time. After it was determined that Laurie would buy the business we had to work on payment options. I wanted her to be able to take over the business without it being a financial burden. We involved our attorney and CPA in helping us work out the details.
- I had discussions with other advisors that had plans for a family succession of their business and found that many of those plans failed because the son or daughter was not as fully invested in running the business as the seller. The buyer might not have the ability or desire needed for the business to succeed .
- If my daughter had chosen not to take advantage of the opportunity, I would have still used the business valuation but the terms would have been substantially different. There would be no way to gauge the buyer’s commitment to making the transition seamless for the clients and employees.
When you build a business from the ground floor up, you can become emotionally attached to your business including the clients and employees. It is your “baby”. You want the next “parent” to continue to nurture that child as it continues to grow and prosper.