Some advisors have built-in succession plans: sons and daughters.

    When George Marotta, now 80, offered his Palo Alto, Calif., advisory firm, Marotta Asset Management, to his three sons, they all turned him down.

"We had small children at the time," says son David Marotta, 46, "and I didn't want to move them to Palo Alto, Calif., from Charlottesville, Va." George successfully sold his firm to an outsider instead, but still had a handful of clients scattered around the country who didn't go with the sale. "My father wanted to keep his hand in the business, but didn't really know what to do with those clients," says David.

David graduated from Stanford in 1982 and taught computer science, later providing computer support to his father's and wife's businesses. Working in and around the financial planning field, he eventually caught the bug, which wasn't entirely surprising given his childhood propensities. "Before I was even in kindergarten, I knew the interest rate and mortgage on our family's house, what my father made in salary at the State Department, and how much it cost to run a family." David then bought his father's far-flung clients and serves them from his Charlottesville firm named-that's right-Marotta Asset Management.

We might call the Marotta succession plan an "after-the-fact" plan to find a home for a small minority of George Marotta's clients. Other advisors have succeeded in getting their offspring involved at an earlier stage.

The Single-Child Transfer

Carol Pankros and her firm, CCP Inc. of Palatine, Ill., are industry veterans. "When I started thinking about my succession plan," says Pankros, 57, "I started with, 'What would my clients like?' They'd like as little disruption as possible, someone running the firm with the same philosophy as me, and to be able to trust and have confidence in my successor." She decided the clients' first choice would be to work with family, namely her daughter, Carin Pankros Roman, 29.

"There was never the assumption in the beginning that I'd work for CCP," says Roman, who graduated from Notre Dame with degrees in economics and French and worked with William M. Mercer Investment Consulting Inc. in investment consulting before going to work for her mom in early 2001. When she did make the move, though, she considered it a career move, not just her next job.

"I came in to perform a technology role," says Roman. "I focused on CCP's infrastructure and the need to revise its proprietary Lotus Notes-based client management system." Somewhere along the way, Roman got her CFP and is now responsible for client relationships. She's presently one of nine employees, including four CFPs.
However, she's the only employee, other than Pankros, with management responsibility. And mom and daughter are working on a succession plan, now that Roman has proven herself a worthy successor. In anticipation of that plan, Pankros has reduced her time at the firm as Roman takes on even more of the management. "We're still brainstorming the nuts and bolts of the ultimate transition, but we've had valuations done and discussed things with our attorney." Pankros and Roman expect to have something on paper in 12 months-probably a buyout taking place over five years.

The Multiple-Child Sale

Russell Hawkes, 71, entered the financial services industry so long ago that "financial planning" didn't yet exist. And when son Peyton, 42, joined Russell Hawkes Associates Inc. of Binghamton, N.Y., in 1987 as a broker, he was following in his dad's footsteps. Since then, father and son have co-managed the firm's transition to fee-only planning. In 1992, daughter Rhonda Homes, 38, joined them as the firm's operations and client service manager.

Unlike Pankros' operation, the three Hawkes are their firm's only employees. "Clients enjoy the family aspect of what we do," says Russell. The problem, he admits, is that he sometimes can't bring himself to separate from the comfortable family ensemble he's created.

"We've been grappling with a transition plan for more than a year," says Peyton. "Dad's reached the brink, looked down and backed away a few times." Yet Russell feels certain they can complete a plan, with their accountant's help, by September 2007.

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