In my recent posts, I’ve focused on how advisers can help clients look beyond the numbers when it comes to retirement readiness. This time, let’s shift gears and talk about you. How prepared are you for the challenges that come with retirement? Will you fully retire or remain involved with the firm?
These days, many advisers are forgoing a traditional retirement in favor of keeping a hand in their businesses. Some may continue to work with select clients while others might move into a new role, such as becoming a dedicated rainmaker or CEO. Although there are plenty of good reasons to stay on board in some capacity, it’s important to weigh the decision carefully.
Why Stay Involved?
Benefits for you: As you’ve no doubt told your clients many times, retirement is a major life transition. After spending three to five decades in the workforce, it’s normal for retirees to experience withdrawal symptoms—and advisers are no exception. Besides the loss of a paycheck, you may find yourself with fewer opportunities to socialize and a reduced sense of purpose. Time management may become a challenge as you move from never having enough time to having significant free time with no built-in structure. Maintaining a role in your firm can help smooth these transitions.
Plus, given that young advisers aren’t rushing into the industry, it may be easier to continue working in some capacity than to find a suitable replacement.
Benefits for the firm: Having spent up to half a century in the business, senior advisers in their 60s and 70s bring a wealth of knowledge and time-tested expertise to a practice. Helping clients deal with market downturns is just one area where a tenured adviser can provide invaluable service.
Senior advisers who are particularly well connected may want to focus exclusively on business development for the firm. From a CEO perspective, whether terminating an employee, reviewing the P&L (profit and loss), or strategizing for the future, a senior adviser can offer unparalleled wisdom and deep knowledge of the business.
It’s Not for Everyone
That said, taking on a new role in the firm isn’t something to be pursued casually. Although you may not have all the responsibilities you did in the past, expectations will remain high in your new position.
Here are a few points to keep in mind:
- Even if you’re semiretired, you’ll need to stay on top of your game with clients. The last thing you’d want is to get sloppy with a portfolio, putting a client or the firm at risk. And, with more advisers staying in the industry longer, the watchful eye of compliance oversight will only become increasingly keen.
- If you decide to focus exclusively on rainmaking, you’ll be accountable for delivering financial results. Does that kind of responsibility mesh with your vision of retirement?
- If you shift into a dedicated CEO role, are you prepared to embrace it with rigor? Remember, it will also fall to you to ensure that the next generation learns the ins and out of running the firm.
Staying involved can certainly benefit both the senior adviser and the organization, but it’s essential to set clear job expectations, just as you would for any other employee. Being honest with yourself about your retirement goals and the kind of work you see yourself doing is the key to success—for you and your firm.
Managing Principal of Practice Management
Commonwealth Financial Network
Editor’s Note: Find resources on succession planning and what that actually means to advisers in an FPA webinar titled, “Adviser Needs, Priorities, and Perceptions,” by Brad Bueermann, CEO, of FP Transitions.