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Succession Planning for Financial Advisors: Building an Enduring Business, + Website by David Grau Sr.

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Chapter 6 Charting Your Succession Course

Exit Strategies versus Succession Plans

I fly a lot in my work for FP Transitions—millions of miles, so far. I once asked a pilot, “If the engines of this airliner quit at altitude, say 30,000 feet, how far can we fly before we hit the earth?” The captain said that it would vary depending upon the wind and the load, of course, but around 100 to 110 miles would be a good estimate. This is the same approach that many advisors use toward the end of their careers. Once the engines start to fade, they hold on until the end, keep the ride smooth, and make it last as long as possible. In the absence of all other choices, it’s a great plan! It is a tale of survival. In this industry, however, there are usually other and better alternatives than a dead-stick landing.

Every succession plan we design and implement for an independent advisor is unique. No two are exactly alike. While many plans have common assembly components, plans are tailored to every founding or senior advisor’s unique goals and needs. Succession plans often center on the founder’s need for a lifetime of income and benefits and take into account the founding owner or owners’ age(s), health, time frame, business skills, workweek preferences, retirement preferences, and staffing levels and strengths, among other things. There are lots of plans and lots of strategies, but don’t confuse a formal plan with an idea, a hope, a prayer, or something that will work itself out later on. ...

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