(From the July 2024 Edition of eFORUM)

By Afsar Shah

When it comes to succession planning, financial advisors often ask me, quite simply, “Where do I start?” My suggestion is to start by understanding your why and creating a clear sense of purpose.

Every great endeavour throughout human history has had, at its core, an underlying sense of purpose or mission. Your own succession plan is no different. It needs a sense of purpose that acts like a North Star, guides your decision-making, and enables you to overcome challenges and adversity.

I begin by asking the advisors I work with a series of questions.

First, I ask, “What do you want to accomplish with your succession plan? What outcomes and benefits do you hope to achieve?”

For example, from a strategic perspective, do you want to create a business model that endures beyond your career or one that enables you to stay engaged in the business over time but able to focus on fewer households? From a financial perspective, are you hoping to obtain a certain income stream or achieve a valuation that will sustain you during your retirement years, or do you want to monetize the value of your business and reap the rewards of a lifetime of work?

Next, I ask advisors to describe their core values.

Every person’s sense of purpose is heavily influenced by core personal values and beliefs that lay the groundwork for a succession plan — both its shape and how it’s implemented.

I also ask advisors to describe their definition of success at various points along the succession planning process — not just for their business, but also for themselves personally and for their families. After all, your business is not your entire life, and you are more than just your business.

Last, I ask advisors to envision how their role in the business will evolve over time.

Every advisor plays multiple roles in the business — for example, as owner, manager, lead advisor and/or head of business development. The reality is that your role in the business will (and should) change over time. The key is to be strategic about it so you can control the change instead of having it control you. Ideally, at some point in your career, you want to perform only the role you most enjoy and find most fulfilling.

So, if you’re wondering where to start with your succession plan, ask yourself these questions — about your goals, values, definition of success, and role — to help you better understand your why and create a clear sense of purpose.

What ends up happening is you bring clarity and focus to your succession planning process and ensure your succession plan will be true to the broader vision and strategic direction you’ve set for your business, yourself, and your family. After all, succession planning is not an end unto itself — it’s a means to an end. That end must align with your why and sense of purpose.

Without understanding your why and sense of purpose, it will be exceedingly difficult to effectively develop and implement a succession plan that achieves your desired end results. Given what’s at stake, you can’t afford to lose sight of what’s most important to you and your family.

Afsar Shah is a partner and business coach at The Personal Coach. He helps accomplished advisors looking to protect, maximize, and monetize their plans, with a strong focus on building a robust succession plan.