Best advice for selling your firm? You snooze, you lose

Financial advisers are excellent at advising clients on funding their retirement. If only they practiced what they preached.

Patrick L. Jinks, director of practice planning and acquisitions at Raymond James Financial Services Inc., has seen the problem many times at all types of professional-services firms.

“It is hard to get advisers moving on estate planning and business continuity planning,” he said. By default, many end up with what he calls a lifestyle retirement plan, in which professionals gradually cut their work hours as they age.

“It is human nature,” Mr. Jinks said. “In your 30s and 40s, 60-hour weeks are the norm. Once the kids are out of college or you have grandchildren, it is natural to spend less time in the office developing new business.”

At that point in their careers, many advisers decide to focus on a core group of clients with whom they intend to work as long as they are able. In reality, this is a non-plan — and ends up costing advisers plenty, Mr. Jinks said.

“When you don’t have a plan, the enterprise’s value will peak and then diminish over time,” he said. The antidote is to commit to a plan, Mr. Jinks said.

“An actionable process is key,” he said. A typical plan might be to identify one or more successors to take over eventually in a planned process. The key, though, is acting on it early. The longer advisers wait, the less their largest asset — their business — is worth.