In my last blog, I discussed the top five reasons to not have a viable succession plan. There are however just as many compelling reasons you should have a viable succession plan. Here are some reasons why some advisors have chosen to enter into a PRISM agreement with Pinnacle.
1) Continuity – An advisor who is in good health has prospects who want to know there is a plan in place. She recognizes that it is her fiduciary responsibility to ensure her clients are well cared for and she would like her family to realize a fair value for the practice should something happen.
2) Succession – An advisor in her seventies is planning to retire in the next 3-5 years. She wants to have a continuity plan in place while she begins to plan for her exit. A PRISMPlus agreement allows her to transition clients ahead of retirement which relieves her of considerable busy work as she approaches retirement. Having clients already comfortable with the Pinnacle way will also improve the success rate of the agreement.
3) Stop Gap – An advisor runs his practice with his son. However, the son is just out of college and too green to take over the firm. A continuity plan like PRISM provides a stop gap solution until the son is experienced enough to be a viable successor.
4) Medical Issues – A solo practitioner has a chronic medical condition. He is unable to find a junior advisor who could become an internal succession plan or a local firm that might assume his practice.
5) Multiple Owners – A firm with two owners divide responsibilities – planning vs investment management and are working at capacity. If something were to happen to one owner, the surviving owner cannot continue without the other and is unable to assume the partner’s clients too.
In my discussions with advisors, I often hear how daunting a task it is to find the right solution. Moreover, no one really wants to think about their own mortality so it is very easy to push finding a viable succession plan down the to do list. Yet having a plan in place that will take care of your clients and your family is an important part of your business. Pinnacle has created two simple yet effective solutions to this complex problem:
PRISM – Our Simple, low-risk continuity planning solution designed to protect your clients and your family in the event of death or disability.
PRISMPlus – Our succession planning solution which builds on PRISM by also preparing for a voluntary exit.
On the first and third Thursday of each month, I host an introductory webinar to explain the benefits of the PRISM program and why we are leading the movement to bring viable contingency planning to advisors. To register for our upcoming webinar on March 3, please click < here >.
