Succession planning the family way

Brian and Brandon Heckert

This article is a summary from part of the 2023 MDRT Annual Meeting Session ‘The Great Transition’ where MDRT members discussed how they developed a succession plan that meets their specific needs.

If you haven’t already considered what your business will look like without leading it yourself, you are doing yourself a disservice. A dedication to providing quality service for each client is important, but that doesn’t mean you must do everything yourself forever.

Creating a plan that encompasses your goals and identifies your business’ future leadership is crucial to long-term success.  This plan looks different for every business, and for our team, this means looking to a mix of family members and trusted colleagues to lead the charge as senior leaders transition to retirement. At the 2023 MDRT Annual Meeting, we presented our succession plan as a father (Brian) and son (Brandon), and how we got there.

A succession plan should go beyond identifying new leaders – it is a roadmap for appointed leaders to demonstrate their commitment with both financial and relational buy-in. In a family business like ours, this means breaking through the taboo of talking about money with family and selecting a reasonable financial commitment for the successor.

For our business, this meant Brandon, his brother Michael and another advisor, Leo Barczewski, would begin buying shares of the company and pay over time on the investment. While Brian still owns a fair amount of the business, this financial commitment allows the new partners to build their investment over ten years to align with the succession timeline.

Our timeline for succession goes beyond the financial component. Brian has been slowly transitioning service on client accounts to the Partners and others who will be leading the firm in the future. While this can be difficult for Brian, who has put so much time into these client accounts over the years, it allows the next generation to continue growing within the firm.

The more Brian has been delegating and coaching behind the scenes, the more we’ve seen growth throughout the firm. This is thanks to the differing perspectives and strengths brought from new partners, as well as the growth seen in folks like Brandon, Michael and Leo. We’re looking to continue this gradual shift over the next ten years until Brian fully transitions off client services.

While working with family members sometimes can be difficult, we’ve found that incorporating additional mentors and strength-based delegation are also key to success. For example, the first year that Brandon was at the company, Brian was occupied with his duties as an MDRT Executive Committee member and traveled a good amount of the year. Brandon had the opportunity to look to other mentors like Leo to learn the ropes. These relationships forged during this time contributed to developing his strengths as an advisor.

Our firm also aligns business opportunities with each of our strengths and encourages employees to pursue those strengths. This is not just an HR tactic, but tangibly helps when it’s time to delegate responsibilities during succession planning. Each partner can assist one another as needed while also thriving in their respective area.

Because each partner is leveraging their strengths while also leaning on one another, our firm has grown in our capabilities. The more work that each partner can take on as they learn, the more opportunity for partners to take on work that Brian may have done in the past. With this approach, the firm continues to find new opportunities while also preparing for Brian to step away from work and newer employees step in.

For family businesses, some may think that they will “one day” transition the ownership to a child who wants to lead the business.  This sounds simple but can come with several challenges. By having a clearly defined plan for succession, you create opportunities for client retention and natural growth within your business. By defining both the financial and leadership timelines, we are prepared for the future of our business and our clients.

 

 

 

 

 

 

 

 

 

 

 

About the Authors

Brian D. Heckert, CLU, ChFC, AIF®, QPFC is a 35 – year MDRT member. Since beginning his finance career in 1985, Brian has been an involved and successful industry leader, dedicating his professional life to providing strategic advice and services for individuals and businesses. By serving as the 2016 President of MDRT he has gained a broader world view and brings a breadth of experience to the firm.

Brandon Heckert joined FSM Wealth, Inc. as an advisor in 2016, leaning on past experiences as a Financial Advice Specialist, advising representatives on advanced financial planning strategies. A five-year MDRT member, Brandon has earned Top of the Table status and has spoken at multiple Annual Meetings.