• A letter of instruction and other vital docs (including mission-critical logins)
• Adequate life insurance
• A “winding-up account” with at least three months’ business expenses to give specified agents the means to pay vendors, close accounts, and perhaps facilitate a sale
As a solopreneur in financial service — whether investment advisor, CPA, insurance agent, or attorney — your obligations to clients, and your own best interests, dictate making a viable and fully realized succession plan an absolute priority.
Besides good governance and common decency, there’s another great reason to have a succession plan. It forces you to understand the real value of your practice and how to pass it on to your maximum benefit.
A succession plan, for which there are experienced consultants, forces you to consider options like selling to an outside buyer, passing on to a family member or handing off to a colleague.
There are even firms that can guide you through the process of selling your book of business so that you can have a signed agreement in place now for a transaction that may take place months, years or even decades hence — and it may be something you can revoke at any time.
But it’s vital to understand the succession-planning process isn’t only about selling the shop. It also puts in place a vital document trail that, as a minimum, consists of:
• A power of attorney
• A letter of instruction and other vital docs (including mission-critical logins)