The 3 Threats of Luck in Your Plan
DEAR ADVISORS,
We’re getting ready to celebrate St. Patrick’s Day next week, on March 17th! My mom always makes corned beef, mashed potatoes, cabbage, and beer biscuits, which are drool-worthy! When we were growing up, my siblings would seriously pinch whoever was unlucky enough to forget to wear green that day! Confession => I actually had to look up the reason we celebrate St. Patrick’s Day…it’s a commemoration of St. Patrick bringing Christianity to Ireland! My family never celebrated that part though… it has always been about celebrating Ireland, Irish culture, and the “luck of the Irish!”
It’s funny how something we celebrate (luck) is the complete opposite of what we do in our jobs every day. The purpose of financial planning and exit planning is NOT to rely on luck! We want to plan as accurately as possible, and create a plan that’s going to work even if we never get lucky and win the lottery. That’s what we do for our clients, but I’ve found that advisors often rely on luck in their own plans! *Gasp!* Here are my three tips for advisors to take luck out of the plan:
Hit-by-a-Bus Plan for your Advisory Firm
What would happen to your business if you were hit by a bus today? The sad truth is that if you don’t have a Continuity Plan (a.k.a. Hit-by-a-Bus Plan) then your advisory firm is only worth pennies on the dollar. The best way to avoid that scenario is to have a written Continuity Plan with a Continuity Partner you and your significant other know and trust.
The Continuity Plan is the legal document, including deal terms for selling your firm if it came to that. But having that in place typically isn’t good enough. We help our advisor clients build a process for their Continuity Partner to follow in this eventuality. It accounts for everything, from compliance considerations, to notifying and servicing clients. With a plan like this, your family and clients will be provided for, and your firm is worth so much more!
Hire Your Own Financial Advisor
Don’t roll your eyes! It’s totally becoming a thing that advisors do now! Honestly, I’m over here trying to run an advisory firm which means have a never-ending to-do list and I don’t even have kids yet. When do I have time to sit around updating my own financial plan? #NotAPriority
My husband and I want to make sure we’re still on track to afford things like kids, and retirement someday, so hiring our own advisor was life-changing! Now I know things are going to get done when they’re supposed to be done. I didn’t realize how much space it took up in my brain until I delegated it. Now I have more time to focus on my business, we’re on track with our financial goals, and we approach life with more intentionality and control.
At the end of the day, advisors are real people too. The personal story I just shared with you is why your clients decided to work with you. You don’t know how life-changing it is until you try it for yourself!
Adding your Advisory Firm in your Financial Plan
Most advisors want to “be conservative” and pretend like their financial plan doesn’t include owning or selling their advisory firm down the road. If you are seriously concerned that your business is losing value or you’ve decided NOT to sell or gift it down the road, then that’s probably fine. However, we always recommend putting the business in the base facts of your financial plan because it’s such a huge part of your life. Your plan doesn’t make sense without it.
Typically we run scenarios for our advisor clients to see how getting a lower sale price for your advisory firm would affect your retirement projections. But your business needs to be in the base facts of your plan! To do that, you need to know how much it’s worth, and the annual growth rate. Getting an updated business valuation will give you a conservative business value, and by going through the process, you’ll calculate the growth rate as well. This is all included in our firm’s financial planning process for no additional cost!
Are you relying on luck in your business or in your personal financial plan? One of the things our advisor clients often say is that they feel guilty that they haven’t been managing things the way they know they’re supposed to be done. You don’t have to rely on luck or feel guilty anymore! We help advisors work through these feelings and get back on track. Don’t be lucky; have a plan! Just give us a call and we can help you secure the future of your family and your financial advisory firm!
Warm regards,
Brooklyn
P.S.
At Ellevate Advisors, we believe that advisors deserve to retire too. What does that look like for you, your family, and your business? Let’s figure it out together! Click here to schedule an initial phone call with our team today or get to know me on my bio here!