When Your Succession Plan Is Derailed

Beverly Flaxington

Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.

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Dear Bev,

I hired a young guy in three years ago with the expectation I would give him ownership and have him eventually take over the business. I want to wind down and have been giving him a large percentage of my clients to manage. Lately he has been talking about moving back to where his wife’s parents live. He said he isn’t sure if this business is right for him. How do I get him to make a decision?

Mike B, CT

Dear Mike,

Your inquiry reminds me of the first of my five “secrets” to human behavior – “it’s all about me!” Both of you are focused on what you need and care about.

A piece is missing: what’s best for both of you and the business overall?

Do you have agreements in place with this employee so that he knows what the future holds? I often see advisors hire someone, knowing what they want the future to be for that person, but they don’t tell the person! The advisor might want to wait and see what happens and test the employee out over time, but that leaves the employee in a state of limbo and having to answer questions on their own about their future.

There is a lack of communication between the two of you. You are wondering what he is thinking and going to do and he is wondering what your long term plans are for him and for the business. He may be having these musings to force a discussion with you.

I strongly suggest instead of worrying, thinking or perhaps getting frustrated about the situation before you have all of the facts and data, take him out to lunch and have an open discussion. Let him in on the plans you have for him and how you see the future unfolding.

Ask him about his intentions directly and then, whatever direction the two of you take, make a plan together about next steps.

Dear Bev,

I’m a financial guy. I’m not a psychologist or a counselor. From what you and others write, we are all supposed to be coddling clients and caring about their feelings. It’s nonsense to me – what about the investments and the financial planning?


Dear Douglas,

While it may appear to be a numbers business you have chosen, there is nothing closer to most people’s hearts and minds than their money! Maybe health and family rate higher, but money is in the top three.

You are in the people business whether you want to be or not. There are loads of roles for numbers-only investment people investing institutional money, doing financial analysis behind the scenes, running separately managed accounts. And there are many, many other roles where “just the numbers” is the focus in the financial services industry.

But, if you are working with clients – as financial advisors are – on a regular basis, even if you are primarily an asset manager and your focus is the investments versus the planning, you still need to know how to read people, communicate clearly and get your ideas and information across.

Building trust is about performing well and doing what you say you will do, but it is also about being a strong, proactive communicator. On the other side of those investment dollars sits a human being who has thoughts, feelings and attitudes toward their money, and toward you if you are working for them. Some need higher touch than others, but it takes learning about people to figure out how to approach each client.

You can ignore the people side of your practice and not practice therapy per se, but it would behoove you to take an active interest in learning about people – how they think, how they communicate and how they want to be served. You could work to develop some “soft” skills alongside your knowledge of the hard dollars.

Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995; in 2008 she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).

She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including the Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.

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