Succession Planning: Put Internal Candidates to the Ultimate Test

It’s inevitable.

At some point in the future you will step away from your business.

And if you’re fortunate enough to be the primary advisor or owner of that business, that day will carry even greater significance.

So much is at stake:

• How will your absence affect daily operations and team members?
• How will clients react to your departure?
• Will the value of your business decline or change for the better?

These questions need answers before you make your exit, whether that be in 10 years or 10 weeks.

One solution advisors gravitate towards is finding a successor as their worthy replacement.

Pass the Baton

Ideally, your successor would transition into your role with little disruption.

But that’s easier said than done.

A little over half (51 percent) of advisors surveyed in the study “The Succession Challenge 2018: Why Financial Advisers are Failing to Plan for the Inevitable” show that one of the biggest challenges in succession planning were strategic, e.g. finding the right successor.

Performing your due diligence through face-to-face interviews, referrals, and background checks are all necessary factors when selecting candidates (not to mention your gut instinct). Still, that may not always be enough to put your mind at ease.

Seems like the only real way to know for sure whether a candidate will be successful is to actually hand them your job.

And that’s exactly what we’re suggesting.

Let the Experiment Begin!

It may sound unorthodox, but to truly get a glimpse of a candidate’s mettle is let them run your business while you’re on a short leave or vacation.

Think of it as a trial run. Just be sure to set guidelines.

Be transparent about your expectations with your candidate, but remember, this is still an evaluation. Think about the goals you want them to achieve:

• Did emergencies arise? If so, how did they handle them?
• How did they treat your clients? Did they go the extra mile?
• What feedback does your team have about this person?
• Did they work independently or did they reach out to you for guidance? Which would you prefer?

Going through this exercise will not only determine if your candidate is capable of doing your job, but it could also put you at ease when it’s time to walk away.

Looking for additional best practices and advice on succession planning? Check out our handy succession planning checklist by following the button below!