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Don’t Confuse Continuity Planning With Succession Planning

By Crucial Clips     February 26, 2014
The following text is a transcript of a portion of a speaker's presentation made at an industry conference or during an interview. This transcript solely represents the view of the individual who spoke, and not the view of Financial Advisor IQ or any other group.
Source: FAIQ Exclusive, Feb. 26, 2014 

TOM COYLE, ASSOCIATE EDITOR, FINANCIAL ADVISOR IQ: I talk to a lot of advisors about succession planning, and write about it a fair bit too, but I learned something recently that’s kind of interesting. In an industry where the average age of the advisor is over 50, advisors are woefully unprepared for succession planning. Some of the statistics, as bad as they are, may be even worse, due, says Dan Seivert — he’s the head of an investment bank called Echelon Partners in California — to the fact that advisors are confusing continuity planning with succession planning.

Continuity planning is setting aside the passwords and user names and all the good stuff you need to keep a business going if someone gets hit by a bus; a succession plan is having in place a solid sale agreement for your business. A succession plan is only as good as the actual deal that backs it. Having a plan to sell the business or a plan to make a succession plan doesn’t count. I’m Tom Coyle, and this is FA-IQ.