Trending
It has been said, when lying on a deathbed, fed people ever say “I wish I spent more time at the office.” There is supposed to be a pot of gold at the end of the rainbow, a reason why you work as hard as you do. What is your exit strategy?
Are you a fan of James Bond movies? The supervillain always has an exit strategy. If they don’t live to use it, Bond find the escape pod that detaches from the underwater lair (Moonraker) or the small submarine on the deck of the offshore oil rig (Diamonds are Forever). Everyone needs an escape plan or an exit strategy.
Why is this important? If you are an experienced professional who is older, your client will notice. The silver hair (or the lack of hair) might be the clue. Retirement planning is an important investment objective for almost every client. If you are talking with them about financial independence (when they can hit the “eject” button), the chances are good they assume this is part of your plan too.
Some prospects will say “I don’t want an older advisor” for that reason. The logic is retirement planning takes on greater importance as the client ages. They don’t want you “hanging up your spurs” when they need you most. You have had the experience when visiting a favorite store/restaurant/hair salon, looking for that family face and getting told “They aren’t here anymore. They left.” Personal finances are serious business. People are attached to their money. They want you to be here when they need you.
Let us look at seven ways you can address the exit strategy issue with clients:
1. You love your job.
Your job is your life. You have known some of your clients for thirty years. You are now the advisor to your grown children. You have no plans to retire. They will need to carry you out feet first. You are in good health.
2. Advisor and son.
(Or daughter). You are bringing the next generation into the business. You see your practice as the family business. You have groomed your son or daughter to step in then you eventually decide to retire. Your adult child, also a firm employee, attends client meetings alongside you.
3. You are a client of the firm.
This put the relationship on a higher plane. They have a long term relationship with the firm. Forget retirement for a moment. If you were killed by an exploding cappuccino machine, the firm would instantly reassign your account within the office. Ideally it would be to another advisor experienced in working with clients with your specific needs. You would not be cast adrift.
4. You are on a team.
The client is a client of the team, a larger entity. It might have a name reminding you of a law firm. You are their primary contact person, but several people have a role in delivering good service. If something happened to you, the other team members would provide continuity.
5. You have a transition package.
This has become a popular way for senior advisors to gradually transition into retirement. This is similar to the team referenced above, only you are not a senior partner, you are in a different role. You still work directly with your clients, but clients will gradually transition to other team members over the next few years. The goal is to have a seamless transition.
6. You brought on a junior partner.
You don’t have a child. Maybe you do, but they don’t want to get into the business. You have hired and are training a junior partner. They will eventually provide continuity when you retire, many years in the future.
7. Who is really the day to day contact?
Our financial advisor is great. We have been together since I entered management (and gave up my book) in 1995. We have been together 40 years! Although she “calls the shots” my primary day to day contact person is her licensed assistant. When something needs to get done, I tell her and she gets the answer or completes the task. My advisor might retire someday, buy I will be comfortable as long as her assistant is my primary contact at the firm.
Clients need to know you (or somebody they find acceptable) will be there. They are thinking about the future. Have you addressed this issue for them concerning your future plans?
Related: Achieving Balance in an Ongoing Advisory Relationship