Communicate your succession plan to clients

It helps with clients’ peace of mind

By Sharon Ho | June 18, 2018 | Last updated on June 18, 2018
2 min read

Name:

Joe Barczai

Occupation:

Semi-retired; working part-time in project management

Location:

Prince Albert, Sask

Age:

64

Investing since:

1983

Has an advisor?

Yes, since 1988

This article is part of the Advisor’s Edge 20 Ways to Be a Better Advisor feature package, published in the June 2018 edition of AE. Click here for more tips and to learn about our 20th anniversary.

As they were making plans to retire, Joe Barczai and his wife started to wonder about their advisor’s retirement plan. So they asked—and were told she was winding down her role in her practice.

“She’s making sure we’re building a relationship with everyone in her office,” says Barczai. “We’re pretty comfortable with the relationships we’ve built and her plans for us going forward.”

Advisors who haven’t communicated their succession plans to clients have a responsibility to do so, says Barczai, and to enusure clients know who will look after their portfolios in case of illness or emergency. They should be able to say, “‘If anything happens, this is where your portfolio is going,’” he says.

Barczai emphasizes that retiring advisors need to help their clients transition to a new advisor by choosing someone who the client feels is “best aligned” with their objectives and able to carry out their strategies.

“A succession plan doesn’t take hold in a week,” says Barczai. “The earlier a potential alternative can be introduced, the sooner a relationship can be developed.”

To develop that relationship and gain his confidence, Barczai says a new advisor should leave his investments as they are and then work with Barczai to adjust his portfolio over time as his needs change.

“A new advisor should have a clear understanding of what your objectives are, where you are in your overall plan, and what risks you’re prepared to take,” says Barczai. “I need to go into a transition having confidence my financial resources are going to be managed in a way consistent with what I’ve become accustomed to.”

Sharon Ho