Succession Planning: mentorship and strategic planning

By Danielle J. Genier and Ryan J. Perkins

This article is a summary of part of the 2023 MDRT Annual Meeting Session ‘The Great Transition,’ in which MDRT members discussed how they developed succession plans that meet their specific needs.

We’ve all seen advisors who are still working today because they haven’t identified a successor.

Succession planning can be especially hard to start when you don’t have interested family members– it isn’t easy to find someone that feels like a good fit to take over a business you’ve built. However, succession plans are worth the hard work, allowing advisors to continue the mission of their firms through successors.

We have kept well-established clients as well as made new connections through our executed plan and continue to build on the foundation Danielle established in her career. Following the timeline we developed as seller (Danielle) and buyer (Ryan), we have created a successful business plan and partnership.

Vision for the future

When searching for the right person to take over your business, remember that you are also being evaluated as the seller. The buyer wants to see if it is worth their time and money. Ryan had been in business leadership for a few years before connecting with Danielle and had been approached a few times by other advisors for jobs.

What was missing for some of these other businesses was any weight behind the offer. There would be a verbal exchange about the opportunity, however not one of them offered mentorship or future ownership.

Danielle was looking for someone open to her mentorship and advice. It’s not easy to transition a business you’ve built into someone else’s care, so Danielle needed someone who was looking to grow and learn as well. In our case, both of us had a vision of what could become of the company. We let our visions lead our decision-making along with candor about the goals we planned to achieve. A partnership naturally occurred as we continued to work together. Although Ryan is Principal and owns the firm, we continue to operate as partners.

As we began to have serious conversations about introducing Ryan to the business, it was essential for him to have a proper estimate of the financial standing and growth potential of the business. This estimate was necessary both in determining the selling price and developing an overall understanding of the company’s value.

You can’t rush this process, as you want to ensure a smooth transition by your desired retirement date. Having built this firm over her career, Danielle had an idea as to when she wanted to transition, looking to fully retire by 2033. Our desires were aligned from the beginning, and it seemed like a dream pairing.

Executing the plan

When Ryan first was introduced as a leader of Genier Financial Services, he bought shares and injected personal capital into the company. Danielle provided funds in the form of a loan to aid in Ryan’s purchase. There were two forms of payment options for Ryan to tackle this loan, which was paid back without issue. The loan was handled in-house, with Danielle providing seed money for the first few months.

When Ryan was ready to purchase, we negotiated how much growth in residual income had occurred in the first five years of working together. This in-house funding made it possible for everyone to strive without jumping through hoops. Without Danielle’s financing, we wouldn't have been able to execute the timeline we established. The investment turned out to be worthwhile, as we began seeing growth in the company within just a few short months.

From the time Ryan became Principal, we grew the company as a team. It was incredible to witness the time and effort paying off so handily, with Danielle continuing her work in client management and growth while Ryan expanded his knowledge and connections. Without the teamwork from our working partnership, the business wouldn’t have grown this much in a short timeframe

We didn't only transition our shares of the company – we transitioned clients and the office team. Danielle’s effort to demonstrate Ryan’s value was a crucial step in connecting with both the community and the internal team. It isn’t easy seeing a 25-year-old coming in with no experience plan to take the helm of a business you’ve relied on for years.

Danielle was able to bridge this gap both with our team and the clients. Ryan started working in financial planning at 25 and was 31 when he purchased the company. During the first few years before ownership, Ryan built respect with community members and the team through building new connections with current clients and other business leaders.

Now, Danielle’s focus is on established business leaders while Ryan focuses on new business and young professionals. While we have days when we may not agree, we are able to discuss disagreements with one another to find solutions and continue the vision we developed.

Transitions are never easy, especially with the intricate details needed to find a new leader for your company. However, without taking these steps, you and your community are missing out on the potential a new leader can bring. As you consider what the future holds for you, consider how you can partner with someone either as a mentor or mentee. This is a life-changing decision and will lead to the continued success of your clients and business.

 

About the Authors
Danielle J. Genier, CLU, CFP is a 24-year MDRT member with 17 Court of the Table and 11 Top of the Table honors. Genier established her business Genier Financial Services in Timmins, Ontario in 1991 and has been dedicated to helping members of her community find solutions to attain financial security.

Ryan J. Perkins, CFP is a 5-year MDRT member with 2 Court of the Table and 1 Top of the Table honors. Having grown up in Kirkland Lake, Ryan has a keen understanding of what folks in Northern Ontario need and consider important.