How to Communicate Your Business Succession
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The financial media regularly features stories about the demographic challenges of the industry: aging advisors who build robust practices and are wondering who will succeed them and serve their clients after they retire or pass away. Creating your succession plan is a must. It’s also smart to prepare communications about the succession well in advance. How you communicate to your staff and clients is critical to their experience of the process.
Below are the components of a succession communications plan and the steps to take to put them together. Working through these steps is useful and rewarding exercise.
Identify your key constituencies
A successful financial advisory practice can touch a lot of people. Think through all the people who will need to know if you were unexpectedly out of the picture. Here are a few:
- Partners in your firm
- Board of directors
- Bankers, accountants, lawyers or other service professionals
- Community, church or places where you’ve volunteered
What do you want to say?
Think about what you want to communicate about your practice and how you’ve crafted your career. When you’ve built a practice over many years, there will be a lot to say about your firm and what it has meant to you. Let your customers know what will happen and share information about who will take over and how those who succeed you plan to carry on the firm and culture you created.
Create an outline for what you want to say. Even if you aren’t planning on retiring, this is a critical step. Few want to contemplate a worst-case scenario and what would happen in the case of an accident or death or finding themselves unable to serve their clients. Craft your own personal history – a eulogy of sorts telling the story of your business and why and how you chose to create it. This might be a couple of paragraphs talking about your history, what you accomplished professionally, what you did in the community and what was meaningful to you. Think through what was important to you. What elements of your story do you want to make sure get told?
How to communicate
Create draft communications to address all the key constituencies who will need to know. These communications can take several forms – scripts for a meeting, a letter, a website article or a news release – depending on the audience.
My firm often starts by crafting communications to an advisors’ internal audiences – your firm’s partners or board and employees. Here communications often take place in meetings or one-on-one, where talking points or a script can be helpful for anyone charged with sharing the news.
Communications with clients may take a tiered approach. For some, a phone call is warranted. For others, a letter or email is appropriate.
Broader communications may take place via a website article or social media posts. A news release may also be a good idea – especially if your firm has been covered in local or industry media and this will be considered newsworthy.
What materials are needed:
- Talking points for a meeting with partners and board members
- Talking points for a meeting with employees
- Letter and or talking points for a communication to clients
- Website article
- Public announcement/news release
- Social media posts
Identify who will communicate this news. Your succession plan should identify who will take over. But you will also want to think through who will need to make the phone calls or send the letters.
Let’s consider how this might work in practice. Consider a hypothetical firm led by Bill and his daughter Jean. Bill, 75, founded and is now chairman of a thriving advisory firm that serves hundreds of families and employs numerous advisors and a full support staff. His daughter Jean, now 50, manages the firm while also serving as an advisor. While Bill is semi-retired, he still comes to the office, serves a handful of clients, is involved in the community and is a key part of the business.
Bill and Jean created a succession plan in the event either one of them were to die. Part of that plan included a communications plan to detail who would need to be informed. As part of the communications plan, they created drafts of eulogies to post to the website and news releases that could be shared if either the father or daughter passed away. While it was difficult for each of them to think through what they would say in this worst-case scenario, it was also a rewarding exercise to define what their careers meant to them and how the company and their clients would be cared for in the event of their deaths.
Communicating about the passing of a loved one during a period of grief would have been difficult for either Bill or Jean, so creating a plan is a gift to those left behind. Creating these materials and having some input into how his story gets told was particularly important to Bill, who created the firm and was proud of the service he provided to his clients and his work in the community.
But Jean too appreciated the opportunity to think through all potential contingencies – her father passing away of old age or either of them passing accidentally – and what it might mean for the business. Both found it gave them peace of mind.
Creating succession communications serves the important purpose of forcing you to think through parts of your business that still need work and things you want to do before the next generation steps in. It is particularly helpful for those left behind who unexpectedly need to communicate after you are gone.
For more than 30 years, Jody Lowe has led media outreach, strategic communications, investor relations and media training for financial services firms. She spent 16 years as director of media relations and corporate communications at an asset management firm. Then, in 2003, she founded the Lowe Group, which works with asset managers, mutual funds, RIAs and financial advisory firms, hedge funds and other alternative-investment managers, fintechs, ESG/sustainable and impact investment firms and others.