Business Succession Planning How Prepared Are You? CAIFA

Toronto (October 17, 2002) “The value of a financial advisor�s practice can be maximized by putting in place a well-thought out succession plan” says Sandra Foster, President of Headspring Consulting Inc.

Headspring Consulting Inc. asked a series of questions related to succession preparedness as part of the 2002 Financial Advice in Canada study. The retention of clients and their assets when an advisor sells, retires, dies or leaves the business is an important issue for advisors, their firm, and the manufacturers whose products they recommend.

Sixty-eight per cent of respondents had eight or more years of experience as a financial advisor or planner. Thirty-one per cent were over 50 years old.

Fifty per cent of planners indicated they had no succession plan. Twenty per cent of respondents indicated they had a succession plan in place and 30 per cent indicated they were currently working on one. Of the respondents over 50, thirty-one per cent indicated they did not have one in place; another twenty-nine per cent indicated they were working on it.

“Most financial advisors and planners are entrepreneurs who must prepare for success and transition of their practices. The results of the survey indicate that the majority of advisors and planners have not yet put in place their own formal succession plan,” says Sandra Foster.

Of those who did not have a succession plan, 53 per cent indicated they felt having a succession plan was not a priority and another 21 per cent indicated they planned to just sell their business outright when the time comes.

“A succession plan in more than planning for when an advisor will retire or leave the business. Done properly, it includes planning for unforeseen events, including death and disability” says Foster. “Many business owners struggle with finding the right successor and developing the formal agreements, but having a succession plan in place will help to protect the value of their business.”

Sandra Foster is also the author of Buying and Selling a Book of Business: What Every Financial Advisor and Planner Should Know (2001, Headspring Publishing and will be presenting a full-day workshop on Buying and Selling a Book of Business through CAIFA in Calgary on Monday, October 28th and in Toronto on Monday, November 11, 2002.

The Canadian Association of Insurance and Financial Advisors (CAIFA) is a voluntary, not-for-profit professional association whose members, gathered in 50 chapters, are represented in most major cities and towns across the country. CAIFA members provide financial advice, and market and sell financial products to over nine million Canadians.