Advisors: Don't Leave the Client out of Your Succession Plan

What is most frequently left out of an advisor’s succession plan is the client?

Not the assets, but the behavioral side of the client. After all, 93.7% of the financial planning process is the behavioral management of the client, so why wouldn’t this information be a valuable part of your business and your plan?

When the advisor is close to retirement, the client really has three questions:

  • Will my portfolio be similarly managed and allow me to reach my goals?
  • Will the relationship with my new advisor be an enjoyable one?
  • Will I receive the same service?
  • You will notice that the majority of the client’s concerns deal with personality and behavior.

    Now let’s move to the new advisor. They want to be sure to retain as many clients as possible. According to a Price Metrix Study, advisors retaining 95% of clients 2010-2013 grew AUM 25%; those retaining 80% of clients, grew AUM just 12%.

    What was a “good fit” for the retiring advisor may not be a good fit for the new advisor. While you don’t have to prospect to acquire this “transitioned” client, it can feel like you are starting over since you are just beginning the relationship.

    There is a certain amount of trust that is transferred over from the retiring advisor but the new advisor will have to build it based on their unique personality.

    Imagine being able to turn over your clients with the behavioral big data on how to sell, service and create a unique experience. The first appointment with the new advisor would be so much easier and the client would feel understood.

    Trust would be built at a much faster rate. And trust is the key to retention.

    Start building a behaviorally smart succession plan to ensure your clients will stay with a firm that you worked so hard to build!