When it comes to succession planning, I believe it’s never too early to start.
In fact, nine times out of ten, people should have started sooner than they did because the earlier you prepare, the more time you have to plan, the less financial strain you put on cash flow, and the less stress you carry when life throws the unexpected at you.
I’ve seen firsthand the impact that good planning, and the lack of it, can have when a dear friend of mine, a successful tech entrepreneur, passed away at just 40 years old.
In his mid-30s, he had already put in place the kind of estate and succession planning most people don’t want to think about at that age despite the common feeling that it was too early as most people do not like to consider their mortality.
But because he acted, his family is now secure and able to maintain their lifestyle, free from the turmoil that can so easily follow an unexpected loss. It’s a powerful reminder that none of us are invincible, no matter how young or healthy we may feel.
Unfortunately, I’ve also witnessed the other side and have been involved in transactions where advisors or business owners delayed their planning until it was too late, literally.
In two separate situations the individual passed away before signing the paperwork. Their families and clients were left scrambling and the businesses ended up selling for pennies on the dollar. It’s heartbreaking, and it’s avoidable.
But even within our industry, gaps in these important elements of financial planning are common and many financial advisors don’t have formal, written succession plans.
To me, this is one of the simplest yet most critical steps we can take. Even if you change it later, having something in writing protects the majority of your business’s value and gives your family and clients a clear direction.
Family conversations are another crucial piece of the puzzle because money and family can be like oil and water. Emotions run high, misunderstandings brew, and silence only makes things worse.
I’ve seen families stop speaking to each other after the death of a parent because no one had those tough discussions ahead of time and so, while bringing family members into the process early may be uncomfortable, it helps set expectations and avoids conflict down the road.
Succession planning is also about honesty, especially when a family business is at stake.
Sometimes the next generation doesn’t want to take over, which is not necessarily a bad thing, and in many cases, the right answer may be to sell the business and create liquidity. For others, the younger generation may reinvent the business, evolving it into something their parents never envisioned.
Either path can be successful, but ignoring those conversations usually leads to disappointment and resentment.
One of the biggest myths I encounter is around business valuation.
Many owners have an inflated sense of what their business is worth, shaped by years of blood, sweat, and tears, but most business owners I meet have never had their business formally valued. Without that reality check, it’s impossible to make informed decisions.
I’ve worked with clients who thought their company was worth $4 million, only to discover, through professional valuation, that it sold for $15 million. That’s the kind of difference planning and perspective can make.
As I look to the future, I see succession planning evolving in ways that better align with the next generation.
Younger professionals today aren’t just looking for income, they want a clear path forward, long-term opportunity, and a sense of ownership in the success of the business. Incentive structures, equity participation, and transparent growth plans are becoming key to keeping talented people engaged.
At the end of the day, succession planning isn’t just about transferring wealth or a business, it’s about protecting people, preserving legacies, and reducing uncertainty. It requires us to face difficult truths, have honest conversations, and be proactive, even when it feels uncomfortable.
For business owners, the company is often more than an income source. It becomes their largest asset, their retirement plan, and in many cases, part of their identity. Advisors who understand that dynamics can deliver far greater value than traditional financial planning alone
John S. Winslow, 57, was indicted just over a year ago for his scheme to steal from an elderly client.
Hamachi's new model portfolio partnership and an industry-first solution from Vestmark join the growing wave of AI tools for wealth managers.
Meanwhile, LPL attracted a five-advisor team managing $380 million in Kansas, while a veteran with stripes from Morgan Stanley, UBS, and Fidelity has joined Prime Capital Financial.
At Goldman Sachs’ RIA conference, Dynasty’s Shirl Penney said an AI clone trained on his emails and speeches could be the first of “hundreds of digital employees.”
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
