Planner shares how he navigated the challenges of his own succession-planning journey
As a financial planner specializing in retirement, Daryl Diamond knows the importance of ensuring a smooth transition. And that’s exactly what he set out to do as he started his own process of succession planning.
“Our particular practice has focused for the past 30 plus years on structuring income for people when they retire. So we've had a chance to witness this event called retirement through the lives of our clients,” says Diamond, a veteran advisor at Diamond Retirement Planning Ltd. with Investment Planning Counsel.
While 65 years old is the milestone for many people to retire, it was just a number for Diamond and his wife Karen, who’s also an advisor and his partner in the business. The most important thing, he says, was knowing that their clients and the staff that helped grow their practice would be left in good hands.
“Price, the sale of the business, taxation issues, those are all important. But we like to echo the mantra that we're in a people business that involves money, not the other way around,” he says. “We felt that gave us an obligation to ensure to the best of our ability that everyone that had trusted us, whether it be a client or a person with whom we work, were looked after in the best way possible.”
As part of that process, Diamond and his wife made a point to tell clients about their plans early on. Aside from answering a gnawing question – what will happen when our advisor retires? – those discussions set up a long glide path for the change to come.
“We always talked to clients about continuity because retirement is a process, it's not an event. And we owed it to our clients to make sure we had some form of continuity in place that was the least disruptive it could be,” Diamond says. “Really, for them it's an opportunity to get that unknown out of the way.”
According to Diamond, finding a buyer they could feel “comfortable and confident” in was a challenge. Aside from dedication and the right credentials, they were looking for someone with the financial ability to acquire the business; they were able to get support on that front through a specialized succession program offered by IPC.
But of paramount importance, he says, is the succeeding advisor’s ability work well with their clients as well as their support team. Diamond recalls one advisor who looked perfect based on his resume. But as they went into the transition process, he and his wife quickly realized the candidate wasn’t as good a fit as they’d hoped. As things went, they knew they needed to make a change.
“It’s almost like marriage. It’s more luck than skill in terms of making things work out,” Diamond says. “You can interview a person a thousand times, but until you’re in front of a client with them, you really don’t get a feel for how things are going to play out, how the chemistry works, their follow-up skills, and their overall acumen.”
After evaluating several more candidates through different search programs with the help of IPC, they found the perfect fit. Aside from having the right designations, the succeeding advisor had around 12 years of experience in the industry; counting the two-year transition period for the business sale process, now he has about 15 years of industry experience behind him. Beyond that, he was also vetted and given a seal of approval by the practice’s admin team.
With the deal officially consummated and the two-year transition process at its end, Diamond is now making his graceful exit, though he’ll still have a toe in the water as a consultant for the practice he and his wife created. While he sympathizes with advisors who can’t imagine ever retiring – he was in that camp himself, not too long ago – he also strongly encourages them to give it the consideration it deserves.
“As you continue to acquire new business, you’ll come to a point when you’re much older than the clients you’re talking to. And as you ask them when they plan to retire, they’ll start asking the same thing,” Diamond says.
“It sneaks up on you, so you have to prepare for it well in advance … think about what boxes you want to check off so that when the time comes, you can look back and confidently say you made the right move.”