A Beginner's Continuity Plan for Your Advisory Firm
DEAR ADVISORS,
What kind of exit plan do you really need? Today we’re giving tips for new advisory firms. These tips are also a good place to start if you don’t have an exit strategy in place at all. The Beginner’s Continuity Plan is like a basic Living Will. It’s ideal for new businesses in their first 1-2 years, with a handful of clients and only a few thousand dollars of annual revenue. A Beginner’s Continuity Plan includes:
One-Page Succession Plan - Identify an advisor who would serve as your Continuity Partner. This means they would take on your clients if something happened to you. It’s important to clarify if they would take over your book, buy your book, or arrange for a third-party sale. Here’s the language for this agreement.
Annual Meeting with your Continuity Partner - Get together with your Continuity Partner at least once annually to review your business operations, technology, cash flow, and client demographics. Make sure they know who to contact to get access to your passwords.
Annually Update your firm’s Legal Documents - Your Continuity Partner will rely on your Compliance Manual and Policy & Procedure Manual if something happened to you. Also, make sure your current Continuity Partner is listed in your Operating Agreement.
Hire your own Financial Planner - Your significant other needs a financial planner if something happened to you. This is especially important if they’re not familiar with your business or haven’t met your Continuity Partner.
If your business is ready for the next level of exit planning, stay tuned for next week’s article on the Advanced Continuity Plan. Also, read last week’s article to understand the difference between continuity planning and succession planning and discover which one is right for you!
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!