Financial advisors spend most of their days talking to people about the importance of planning ahead and preparing for the unexpected. Yet most advisors don’t follow that good advice when it comes to succession planning for their own business. Many intend to work past the age of retirement and vaguely suggest that when they do retire, they’ll cash out – somehow or other.
In fact, among advisors over 65, about 60% have no succession plans at all. The reality is, without a plan in place, if something suddenly happens it’s very difficult for an advisor’s family to benefit from the equity in his business.
This is a big topic with many different tentacles worth exploring. Today, I’d just like to focus on one idea – adding a junior partner to your firm.
[Subhead] Benefits of a Junior Partner
Consider for a moment what it could mean to your business to bring on a junior partner. The benefits aren’t limited to succession planning, although that can be a big one. Actually, there are a host of potential benefits.
- A junior partner creates the opportunity for you to grow your business beyond your current capacity. Do you have more clients than you can adequately service yourself? A junior partner can help with that.
- Looking for ways to attract younger clients or connect with the children of your current clients? Turn to your junior partner.
- If you’re considering selling your firm to a third party, a junior partner provides built in continuity, making your business worth more to a prospective buyer.
- Or, a junior partner can be the leading candidate to take over your business, which gives you more control over how your business is handled even after you’ve left. That’s because you have the opportunity to bring a junior advisor up in the business and train them to meet your standards.
All of these are great reasons to consider adding a younger partner to your firm. But none of these benefits can be realized overnight. Particularly if you’re looking to train a long-term successor and cash out your business, it takes time.
No matter what age you are, or how close you think you may be to retirement, if you have a successful practice, adding a junior partner is worth exploring. If you’re curious and would like to find out more, give me a call. I’m happy to talk with you anytime.
Aaron Hasler 612.208.0653