John Hancock arms reps with succession planning tool

The John Hancock Financial Network has released a succession-planning platform for its financial representatives. The company paired up with FP Transitions, a succession-planning-services firm, to launch the new service called Build4Success. The platform was designed to let Hancock's reps sketch out continuity arrangements and long-term succession plans, while also helping them assign a value to their business in the event of a sale to a protégé or a family member. John Hancock will use a valuation model for the insurance side of reps' businesses and it will use that method in tandem with the model currently available for investment firms. Insurance practices are tougher to transfer than their investment counterparts, said Brian Heapps, executive vice president of sales and business development at John Hancock Financial Network. “Revenues are readily transferable from broker-dealer to broker-dealer with client authorization,” he explained. “But on the insurance side, it's more difficult to do that. You have multiple carriers and each company has a way to transfer its business.” Further, recurring revenue from insurance products isn't as portable when compared to a fee-based practice, Mr. Heapps added. Client relationship maintenance also differs between the two disciplines. “On the advisory side, it's not uncommon to contact your client four times a year to review objectives,” said Mr. Heapps. “In the insurance practice, this isn't necessarily a requirement; it's a passive product and not something you'd monitor as regularly.” However, there's intrinsic value in the client-rep relationship, he added, which John Hancock hopes to encourage through the program. The firm's regional offices have also been pitching in by matching junior associates to senior advisers, providing new blood with a mentor and a client base, said Mr. Heapps. “If I'm in my 50s and I might exit in 10 years, I want to tell my client that I have an associate who's taking over so that it provides continuity to the relationship,” he added. “That's a value to the aging rep and the client.”