News Archive

“Barefoot and Fancy Free”…or just “A Failure to Plan?”

By Robert W. Tiller, D.B.A., CFP®, RFC®

TAMPA (March 23, 2021) -- Older, more experienced personal financial planners rock!  They combine their client empathy with professional knowledge helping individuals and families to understand, then pursue their needs, wants and wishes while also planning for the unexpected.

They’ve guided generations of clients in making progress toward and achieving family dreams every day.

Yet, year after year, individuals and families who most need their skilled planning are overlooked.  Those folks being the planners themselves and their loved ones.

The CFP Board recently reported that the Financial Planning Association has stated “only 28%” of advisors felt “very prepared” if a transition of their practice were necessary—and for firms managing less than $50 million in assets only 13% had succession plans.  “Why?” remains the question.  Is it more than just the “Cobbler’s kids syndrome,” where they are simply too busy handling clients’ issues to focus upon their own situation? 

Whereas the Cobbler’s kids walk around shoeless in the fable, advisors’ families may quietly wait in the shadows—not asking for the same attention or planning considerations that are given to clients.

Young or old, each professional knows they may wish to enjoy the same future joys in retirement that they help others to envision.  Also realized is that they too are susceptible to many of the same unknowns as their clients.

Experienced planning professionals generally excel at understanding personal risk mitigation, so most may have sufficient life and disability insurances to protect their families.  Some have likely even procured adequate insurances for their firms to be sustained in their absence—possibly with a “short-list” of advisors whom they would prefer to acquire their business from their spouse or estate.

Unfortunately, those disaster plans may not have also envisioned non-emergency transitions, such as merely aging out of their profession. 

Rationale for not finding someone else to replace them in their own practice will vary, but some of the more common thoughts may include:

“No one can understand my clients as well as me...”

“I’ve learned things others in the industry don’t know...”

“My clients will feel I’m abandoning them...”

Ironically, whatever line of thinking might account for them not having pursued a succession plan, it possibly should be the very motivation for undertaking that objective.

Perhaps, “Why haven’t more advisors put succession plans into place?” is less important than, “How could it be changed?” 

Since nearly all successful personal financial planners/advisors believe that their loyal client bases were built upon a foundation of trust and transparency—what if they simply expanded that transparency to include their own plans?

“Because no one can understand my clients as well as me…I will hand-select my successor with a person whom I would go to myself, were I not in the business.”

This way, they could assure themselves their clients will be properly taken care of if (or when) they are not there.

“Because I’ve learned things others in the industry don’t know…I will groom a younger professional, providing them knowledge beyond the commonly understood areas of the personal financial planning industry.”

The Socratic Method helped instill the idea that teaching all one knows to another perpetuates the continuum of learning.

“Because I don’t want my clients to feel I’m abandoning them…I will demonstrate my respect for them by developing and implementing a safety net and succession plan, to ensure they will continue to be properly cared for—whether my departure is by peril or pleasure.”

Every experienced financial planner knows the empowerment they’ve helped clients obtain once they’ve made an honest assessment of their circumstances, decided what objectives they should pursue, then begun the step by step process of moving toward them.

Outside of all the professional responsibility issues—looking up from one’s desk, to finally see those shoeless kids, could become the final reason to decide to act rather than wait to react.  Consider the sage advice to workaholics everywhere from Planes, Trains and Automobiles’ empathetic character Dell Griffith, “Like your work—love your wife!” 

What many experienced financial planners may not realize is that as the industry has continued evolving from a “trade” to a “profession,” universities across the nation have begun educating America’s next generation of financial planners.  Collegiate degreed in personal financial planning, young people rigorously schooled in the science of the profession are eager to learn the art of financial planning from experienced planners.

The Certified Financial Planning Board and the Financial Planning Association have been encouraging use of this growing source of industry focused, tech-savvy talent to build out “ensemble practices”—where each financial planning firm may establish layers of roles.  Senior partner/advisors, junior associate partner/advisors, client service advisors, Para planners and various administrative roles may all provide an upward career track for incoming professionals, while enhancing and ensuring the firms’ growth and sustainability for clients.

Those more experienced advisors working as independents (whose need to develop an exit strategy may be too soon to build an ensemble practice) may also turn to these personal financial planning schools as many of the mature “second career” graduates have a seasoned appearance and additional knowledge from the business world to befit a faster track toward a mentor/protégée succession plan.

Financial planning professionals may have individual mindsets, motivators or methods for advancing their final duty to clients for ensuring a continuance of service to those who have entrusted them.  Beyond simply heading off a potential SEC disclosure requirement of continuity/sustainability—succession planning is simply in keeping with what successful planners have always done.  Because, as with nearly everything else in financial planning, it merely follows the golden rule.  When planners ask themselves what they would want, expect or demand, of an advisor they trusted (or a family member they loved) if the roles were reversed—the answer should easily reveal itself.

After all, enabling one’s family to someday feel free to kick off their shoes and relax is more likely to be realized once they have some to remove.

“Dr. Bob” is the author of “Forgotten Faces: Family Caregiver Voices,” a 35 year personal financial industry practitioner and Director of the Personal Financial Planning Program at the University of South Florida.  He may be contacted at:  roberttiller@usf.edu