The Succession Wake-Up Call: Protect Your Firm Before It’s Too Late
At Future Proof, industry leaders came together to address one of the most urgent issues in wealth management: succession planning. Or as Brad Bueermann from FP Transitions reframed it, “It’s not succession planning, it’s sustainability planning.” Moderated by Suzanne Siracuse of Suzanne Siracuse Consulting, the session sparked a candid discussion about what advisors must do now to protect clients, teams, and long-term firm value.
Putting Clients and Teams First
Kay Lynn Mayhue shared her personal journey, once selling her own firm before becoming president of Merit Financial Advisors. She emphasized the importance of viewing succession holistically, not just through the lens of advisor continuity. “Don’t expect there to be one person who can wear all the hats; you’re really looking at a team,” she said. Sustainability planning means thinking about leadership, operations, and client continuity as one interconnected strategy.
Internal vs. External: Why You Need Both
When asked about when firms should look at an internal or external succession plan, When asked about the right time to consider an internal or external succession plan, Bueermann emphasized that firms shouldn’t commit too early to a single path. “The answer is both, and all the time,” he explained. Whether transitioning internally to G2s or considering an external partner, the real power lies in running the numbers, modeling outcomes, and giving the firm options. Firms that prepare in both directions not only gain flexibility but also position themselves for stronger valuations.
Compensation and Equity: Keys to Sustainability
One of the most actionable takeaways was the role that compensation and equity play in effective succession planning. “The starting place for any plan is compensation,” Bueermann noted. Aligning incentives with value-building activities, not just market-driven AUM growth, strengthens the bottom line. Mayhue added, “Equity is not for everyone. It’s our most precious commodity.” Used wisely, equity creates true partnership and fosters a long-term ownership mentality across the team.
Developing the Next Generation
Leadership readiness goes beyond technical expertise. Future leaders often reveal themselves through initiative and problem-solving, not titles. As Mayhue shared, “They see a problem, they jump in, and they do it. Your role is to let them run and give them the freedom to mess up.” Mentorship and tools like Personal Development Plans (PDPs) also help rising leaders articulate their goals and take ownership of their career paths.
Planning Pays Off
The financial case for sustainability planning is undeniable. Firms with multiple owners and sustainable leadership structures consistently achieve higher valuations, sometimes up to 48% more. On the flip side, firms without a plan in place often face steep discounts when transitions are forced by health or other unforeseen events.
The Takeaway
The wake-up call is clear: sustainability planning is not about exiting the business; it’s about resilience, protecting clients, empowering teams, and strengthening enterprise value today.
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