Succession Re-Imagined: 3 Reasons a “Retire-In-Place” Option May Be Your Most Rewarding Path to Retirement

By The Lerner Group on March 4, 2021

“Often when you think you’re at the end of something, you’re at the beginning of something else.”

– Fred Rogers

For decades, financial advisors may have been given a false choice; namely, “retire or not to retire.”

Many of the traditional financial big box firms have reinforced this binary choice. Their “sunset agreements” or succession packages were typically focused on an internal transfer of assets. Less attention was paid to ensuring that a slow, thoughtful transfer of client trust over time was the first item on their transition checklist.

Bringing scale and uniformity to the practice was frequently a top priority item for the successor as well. Often the more personalized, high-touch client standard of care suffered as a by-product of this push for productivity gain. Spreadsheets replaced birthday and anniversary calls. Social media posts replaced private VIP client dinners. And, generic newsletters replaced tailored education seminars that engage inquisitive clients and prospects in a two-way exchange of timely dialogue about the issues of the day.

With today’s acquisition frenzy at historical highs, there may be an increased risk of paying too little attention to retaining the magic of what the founding advisor(s) worked so hard to create. Instead, the experience may risk feeling more like a business deal rather than a process design to ensure a soft landing for the retiring advisor, their team, and their clients.

There can be a danger in letting the push to optimize practice profitability rule the day. Perhaps it shows up in how new ownership is more concerned about how much additional revenue or margin might be squeezed out of the practice. You can almost hear the bean-counters saying, “if only the advisor would have adopted these platforms or programs sooner this practice would be worth so much more.”

In many succession transitions, day-to-day operating control and strategic decision-making can change hands relatively quickly to expedite aligning with corporate initiatives. Relationship Management coverage of clients may ultimately be re-assigned to a new primary advisor. And, just before the newly assigned advisor makes their first call to the clients, a “one-size-fits-all” letter of introduction may arrive in the client’s mailbox.

The client is presented with a difficult choice. The client now must decide whether they should recommit to the practice. A leap of faith is required on behalf of the client to stay engaged long enough to bring the new advisor up to speed on their requirements and history with the retiring advisor.

It all adds up to a riskier process than it needs to be.

There is a better way.

What if rather than formally retire-out of your practice, you remained but in a more enriching role. A role that fits you like a glove. A role that puts you in your “highest and greatest use.” A role that provides you the freedom to exercise your passion and skills without the burdens of keeping things “running“.

Many successful advisors want to remain with the practice in a meaningful role. We have heard them say, “I would like to keep doing this perhaps several more years, but without the headaches.” This ability to retain the best parts of your role and let go of the things that someone else can do equal or better is why a “retire-in-place” option is likely to gain traction with RIA founders.

Here are 3 Reasons a “Retire-In-Place” Option May Be Your Most Rewarding Path to Retirement

Reason #1: Client Continuity Remember how you felt the last time you called a service provider you use and got a different service agent each time you called. Did you have to repeat what you were seeking, again and again, each time? Perhaps it got to a point that you simply gave up and either changed brands or tried to do it yourself. Imagine how advisory clients feel when they have to re-hash their financial affairs with someone that does not truly know them as you do.

As a Retire-In-Place Advisor, you can ensure your oversight of client transitions. And clients will know your steady hand is on the tiller should storms appear on the horizon. A progressive “trust but verify” introduction to the competencies and service coverage of their new Relationship Manager can allow for clients to have that soft-landing. It affords your clients the reassurance that you are there to provide counsel and oversight if and when necessary.

• Reason #2: Business Continuity

Buy-sell or acquisition agreements that come with a treasure map and a secret decoder ring might make for a good suspense novel, but it does little for the seamless continuity of a business.

If you decide to sell your practice to a successor partner, it is important to all parties that the going concern functions without disruptions. You owe that to your clients and team as much as to your succession partner. While no one knows all challenges that lie ahead for a practice, a Retire-In-Place option goes a long way in ensuring the smoothest of possible transitions.

• Reason #3: Liberation

Ask yourself, if you had one extra day in the week that you could do only the thing you enjoyed most about being an advisor, what would it be?

Perhaps it would be deeper investment research, perhaps it would be spending more time with your favorite clients pursuing common hobbies together, perhaps it might be attending life event celebrations with your clients, such as their kid’s weddings or graduations.

Someone once said that a role without purpose is merely a job. But a role infused with purpose is an advocation! As a Retire-In-Place advisor, you have the unique opportunity to hand sculpt your most passionate, purpose-driven, ideal role while leaving some of the headaches behind.

Sound good? What are you waiting for? To learn more about how to create your unique Retire-In-Place role, contact Bill Kica at bkica@hightoweradvisors.com ….