2020 brought a series of unexpected challenges and rapid change, not just in the financial industry, but across the globe. So often we speak of planning for the unexpected, and 2020 certainly put that idiom to the test. Still, many advisors aren’t taking the necessary precautions to protect their practices, even in the face of a devastating pandemic. Recently, we lived through an experience with one of our clients who, luckily, did have a plan in place for their practice and who, very suddenly and quite young, died from contracting Covid-19.
This is not an experience we wish on anyone. However, it did serve as an important lesson. One which we wanted to share, especially as we are currently working with his family to transition his practice to a new owner. That lesson is that you should have a continuity plan in place even if you don’t have a successor. For our Ameriprise Advisors, we developed something we call a Guardian Plan, which allows us to take over the practice and manage it in the event of death or disability, while we work with the advisor’s heirs to find a suitable successor and manage the practice sale. We hope that it something you never have to use, and that you get to be a part of the process of finding a successor and enjoying the rewards of your years of hard work. But we don’t get to choose how and when we meet our end. So just as you recommend that your clients plan for the unexpected, advisors too should have contingencies in place should they be unable to run their practice due to death or disability.
Again, in an ideal world you would have a successor named or at least be a part of the succession process, but if you are a solo advisor of any age, you must have something in writing that outlines what to do with your practice in the event of your death. It’s also important to have an accurate and current business valuation done by a third party and update it regularly in order to protect your heirs and their inheritance. You wouldn’t let your client continue without safeguards and protections in place. Make sure you do the same for your practice.
Share This Post
Subscribe to Keys to Success
Receive timely articles and news on upcoming webinars and events by subscribing Keys to Success.
For articles and white papers on acquisitions and successions, please go to our sister site Advisor Legacy.
Related Posts
This blog post is part of a series highlighting Key Management Group team members.
A self-described woman of service, Dawn Rem has been serving our clients with great care and attention since 2007. Like many of our team members, Dawn began her career with KMG in our Client Meeting Prep department. […]
As a practice leader there are plenty of things screaming for your attention. Fluctuating markets cause a flood of worried calls and emails to come in from clients. A staff member puts in their notice, and you have two weeks to find a replacement. A pandemic hits, forcing you to shift to remote work and […]
This blog post is part of a series highlighting Key Management Group team members.
For the past seven years, Andrea Cwiklinski has served as a valuable member of Key Management Group. She came to us from an administrative support role in a financial advisor’s office. Originally, she began in our Practice Management division, but soon found […]
This blog post is part of a series highlighting Key Management Group team members.
Melissa Johnson combines a background in education with a passion for building people as Team Leader of our Financial Planning team. She began her career working part-time in a bank while pursuing her a degree as an […]
The demand for financial advice has grown dramatically over recent years. As that demand has grown, so have client expectations about what advice and services a financial advisor should deliver. As a result, financial plans have become an integral part of the client relationship. The quality of those plans can make or break the client […]
