September 19, 2019

An Act Of Love

As Financial Advisors, coaching our clients to plan ahead and prepare for the expected as well as the unexpected things that life will present to us is very common place. And as a Practice Consultant, I ironically find myself having the same conversations with many of the advisors I come into contact with every week. You would think the very people that advocate the value of planning, being prepared and protected for such life events would be the first to have their houses in order.

As the old saying goes, “The Cobbler’s children have no shoes”.

I’d like to share with you the story of an advisor I worked with in the past that was very good at planning for his clients but like the shoe maker, not so good at preparing and planning for himself. I wish I could say that it has a good ending but it doesn’t. However, it does bring to light a situation I feel is important to address in our industry, Continuity and Succession Planning.

Several years ago, during my time as a sales manager for a larger financial institution, I had an advisor on my team in his early 40s, who had been with the firm for several years, and managed to build himself a fairly sizeable book of business. After two years of working with him, he decided to go independent and open his own advisory practice. With that, he was able to take a lot of his existing book with him and subsequently continued to build a very successful financial services practice.

A few years later I got a call from one my advisors, asking if I had heard the news about our former co-worker. He had just been diagnosed with terminal cancer and had roughly 3 to 6 months to live. The advisor that called to tell me the news had just received a call from one of this advisor’s clients telling him the news. He was worried about his account and wanted to come in to talk with our advisor about possibly moving the account over. He mentioned that he had not heard from said advisor and there did not seem to be a game plan from him and his investments. Where was he supposed go and how would he be taken care on the future?

Several weeks go by and we continue to get similar calls from worried clients with the same story. It was apparent that our former adviser had not planned for the “what ifs” and many of his clients were starting to leave once they heard the news.

As a result, the inevitable was happening, his book was falling apart, reducing the value to any potential buyer and putting a tremendous amount of stress and uncertainty on his wife and family. A truly unfortunate set of events that could have been planned for while lessening the burden on his family during this difficult time. But, there was no plan in place for such an event. There was nothing there to protect his clients. There was nothing there to protect his family and the value of his book.

Tragically, the advisor passed away a few months later as his family was trying to find a buyer for his book of business. By that time, the value of his book was considerably smaller, leaving his family with far less than what anyone estimated just a few short months ago.

As I wrote about previously, “Situations have a way of changing”, and for everyone touched in this situation, things changed quickly; no one was prepared for the “what if” situation.

At the end of the day, Continuity and Succession planning is ultimately an “Act of Love” for our clients and our family’s. I ask that you use this story as an example of why we should each practice by example.

Doing so will deepen your relationships with your clients and show them that you are truly an advocate of the planning process of our profession.