Building your practice: A step-by-step playbook for advisor emergency and retirement exit planning

A well-organized transition process provides peace of mind to clients, successors and exiting advisors

Building your practice: A step-by-step playbook for advisor emergency and retirement exit planning
Christine Timms

Transitioning clients between a retiring advisor and their successor can be very stressful for all participants (clients, successors and retiring advisors). An organized step-by-step process will ensure that very little falls through the cracks and provide peace of mind for all involved.

This article is dedicated to the first six steps of an 18-step process that will help financial advisors organize their transition plan in advance of their retirement. Many of these steps should be well under way or completed before determining the actual exit date.

As all practices, advisors and clienteles are unique, the order and level of attention to each of these steps will vary. However, the earlier an advisor starts the process, the higher the likelihood of a successful transition. Advisors in all stages of their career should employ many of these steps when preparing their emergency “hit by a bus” plan. My clients knew who my successor would be if I was incapacitated many years in advance of my retirement. I am certain that this knowledge resulted in a higher client retention rate as I approached the end of my career as an advisor as well as after my retirement.

These first six steps should be completed by an advisor before selecting their successor.

STEP 1: Clarify or review the practice’s mission and commitment to clients.

STEP 2: Clearly articulate and document the existing business model in detail. In order to choose a successor and for a successor to believe they can successfully transition the clients into their practice, both must understand who the clients are, the services the clients are accustomed to receiving and all related costs. A financial advisor’s business model includes six components:

COMPONENT 1  identifies the characteristics of the most compatible clients of the practice  such as traits, needs, and goals.

COMPONENT 2  identifies the advisor’s unique client services such as

a) client communication methods and frequency

b) the approach to investment allocation and selection

c) financial planning services such as, forecasting, retirement planning, estate planning and

d) services relating to tax reporting, tax returns and tax strategies

COMPONENT 3  of an advisor’s business model includes identifying the processes and presentations for delivery of services and products and processes for practice management.

COMPONENT 4  relates to the resources needed to provide the services such as team members, expertise and software, and who will provide those resources…. often the advisor’s firm and probably some external sources.

COMPONENT 5  identifies how much clients pay for their financial services including how the clients are charged directly by the advisor and other indirect costs that their clients pay (e.g. money managers).

COMPONENT 6  of the business model defines how the practice pays the active advisor.

A customizable checklist process to quickly and easily prepare a document articulating an advisor’s business model is available through

STEP 3: Consider the best future approach to services. For example, perhaps the retiring advisor only picks Canadian stocks but thinks future investments should include managed money, US and International exposure and ETFs. They can modify their written current business model to create the desired service model of their successor.

STEP 4: The advisor planning their exit determines the best future fee structure for their clients. Perhaps the retiring advisor charges commissions per transaction but thinks that fees based on asset values is best for the future.

STEP 5: An advisor planning their exit, should consider how willing and able they are to share their processes and client presentations with their successor. Obviously, the transition is more likely to succeed if the retiring advisor shares all their processes and presentations with their successor.

STEP 6: An advisor planning their exit should determine if a separate successor advisor is needed for different groups of clients based on particular needs such as, specialized financial planning needs, stock picking skills or where the clients live.

STEP 7: Choosing an exit-planning advisor’s successor(s) is the most important step of the process. Completing the previous six steps puts the exit-planning advisor in a much better position to determine the preferred personal qualities and practice characteristics of a compatible successor. An advisor planning for retirement should list the qualities they are looking for in a potential successor including personal qualities and compatibility with the business model component attributes the retiring advisor believes most appropriate going forward. A customizable worksheet for comparison of  potential successors is available as a free download from

My next article will discuss the qualities to look for when choosing a successor advisor. Another article will follow to review steps 8 to 18 which occur after choosing a successor when the chosen successor becomes more involved.

Christine Timms is the author of three Handbooks for the Professional Financial Advisor including “Transitioning Clients and the Retirement Exit Decision” (available in paperback, ebook and audiobook). provides descriptions and testimonials, as well as written and audio versions of the introductions of each book.