Why Financial Advisors May Not Succeed Without a Succession Plan

Posted by adaniels in Blog on June 18, 2012

Here’s something ironic. Even though financial advisors help clients with succession planning, some of them don’t always do the same sort of planning with their own businesses. That’s what an article in Financial Advisor Magazine reveals.

Take Max Briggs, who is the CEO of the California-based FLC Capital Advisors. He survived a brutal shark attack in 2008; he was spear fishing in the Bahamas when a seven-foot shark bit his leg. After the attack, he almost bled to death, and had to be airlifted to a hospital, where doctors reattached his leg.

Briggs’ firm had had a succession plan in place, when his partner died in 2007, but he had not updated the plan after his partner’s death. He tells Financial Advisor that “without a plan in place, if something tragic happens or a retirement occurs, half the business could go out the door.” The company was able to keep nearly all of its clients after the partner died, but if Briggs had not survived the shark attack, there was no new succession plan for his firm. Of course, after the attack, he remedied the situation.

The financial advisor is now explaining to others the importance of a succession plan. According a new survey by MultiFinancial Securities Corporation, 18% of advisors claimed they had a full succession plan in place. Yet Stephan Quinn Cassaday of Cassaday & Company, indicated that those figures seemed too high.

“If 10% of firms have a viable succession plan, I would be very surprised,” Cassaday tells the magazine. “It is a huge problem.”

Written by Lisa Swan


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