When it comes to the idea of succession, one of the chief concerns business owners may have is how to leave a lasting legacy. That makes sense considering most have spent years building a business they care deeply about and which developed and evolved into much more than a career.
With that in mind, below are four steps wealth management firms can implement to ensure a legacy that lives on for generations to come:
1) Set up your business for operational success: Ensure it is a true ensemble practice. Everyone should be replaceable—including the founder. Additionally, all clients should receive a consistent experience regardless of who their planner is from their first meeting to the plan and portfolio design presentation and review.
Further, each touchpoint of your firm should be systemized, standardized and automated where possible. Customization is essential, but the process should be seamless to the point where, if another advisor had to step in, there would be no service interruptions.
2) Ensure a succession plan is in place: Is there someone within your business or network you could sell to? If so, do they have the capital or the ability to get a substantial loan to buy it? If not, consider bringing in an institutional partner to help partner with you and find the perfect successor. Don’t be discouraged if you can’t find a buyer right away because it takes time and patience. It would help if you had a partner that will find a buyer who will enhance your practice, not reinvent it. Further, you need a buyer who will take care of your clients and staff while ensuring that your legacy lives on.
3) Differentiate your business: To ensure a lasting legacy, you must ensure your service offering is unique enough to dissuade clients from going elsewhere. There are thousands of wealth management firms, but what makes your offering stand out? Whether it is your technology platform, niche market, your approach to planning or portfolio design, or something else, create a unique value proposition and make it known.
4) Meet the next generation: Package your firm as a multigenerational office. Build teams of all ages, stages, and levels so your clients and all of their family members have someone relatable.
Also, make it a point to create stickiness across generations of your clients. Start working with their children at an early age by inviting them to meetings or offering educational opportunities. Building relationships with your client’s children will create a reliance on your firm that is hard to replicate elsewhere and will ensure that those assets stay with your firm from generation to generation.
Selling your business is hard enough, but building a legacy does not need to be something that holds you back. If you are thinking about stepping away, try putting these tips into practice today.
Stuart Silverman is president of Bluespring Wealth Partners, a company focused exclusively on acquiring and investing in registered investment advisor and wealth management firms through streamlined succession strategies.