Family businesses interested in succession planning

It is the greatest wealth transfer in human history – more than $1 trillion being passed down from the baby boom generation – and family businesses are looking to advisors for guidance

With most family businesses not making it past the first generation, succession was a hot topic for Canadian family business leaders who attended a recent panel discussion in Toronto.

“Family businesses have a drive and ambition that is unparalleled,” says David Steinberg, Ernst & Young's national private mid-market co-leader, who also moderated the panel. “At our panel, we heard that while most family business leaders are in fact addressing succession, those without identified next generation successors are working closely with their management teams to address traditional transitions as well as potential unforeseen emergencies.”

That's good news, according to EY and Kennesaw State University's Cox Family Enterprise Center's global survey, “Staying power: how do family businesses create lasting success?

The report – in which 53% of respondents were family business leaders who have already made it past the second generation – identifies the keys to lasting success:
  • View succession as a long-term process;
  • Clearly define who has the responsibility for succession; and
  • Work steadily to prepare the next generation for leadership.
That presents an opportunity to partner with advisors, says Mike Stocks, vice president of insurance marketing at Empire Life.

“We’re finding many more Canadians are starting to look for more simple estate planning solutions,” says Stocks. “We want to partner with advisors to help them reach a greater number of Canadians. There’s a group of Canadians who don’t see the need for life insurance and we really want to get them to start thinking about that and start a conversation. We are seeing more and more folks inquiring.”