1. 16 | EXEMPT EDGE - FALL 2015
I
t is inevitable that every
advisor will leave the business
one day due to career change,
retirement, disability or death.
Your own exit from the industry will
either be voluntary in the case of a
career change or retirement, or forced
upon you because of a disability or
death – either yours, or that of a
loved one. Even though at least one
of these scenarios is inevitable, if you
are like the majority of Advisors, you
have not figured out what kind of
Succession Plan will work for you to
deal with these life events. And even
if you have given it some thought,
you may not have prepared yourself
or your business adequately enough
to ensure a smooth transition for
your clients in a way that maximizes
the value of your business.
Retirement and Succession
Planning
Many of today’s Advisors are baby
boomers that will all be looking
forward to life after the ‘9 to 5’ in the
next fifteen years. But retirement
means different things to different
people. For some, it involves sitting
on a sun-drenched beach, drink in
hand, drifting in the middle of the
bay on a boat drowning in worms, or
pursuing any number of passions
outside their business interests. For
me (Marlon), thoughts of retirement
definitely involve more travel, more
leisure time, and the ability to work
on projects that have nothing to do
with the world of business and
finance. Some Advisors may never
desire a formal retirement, opting
instead to continue their work with
clients, or to give back to the financial
services community by spending
more time teaching, coaching and
mentoring younger Advisors. Or
perhaps they will write a book, travel
to conferences and speak, sharing
their lifetime of experience and
wisdom with their audiences. But
there are two things most of today’s
advisors share in common, whether
they want to retire or not: the absolute
need for a Succession Plan and the
current lack of a well-defined and
implemented Succession Plan.
Part of the difficulty is that we tend
to view retirement and Succession
Planning as synonymous, and if we
are not ready to retire, we ignore the
need to plan for this transition. Most
Advisors are in their 60’s before they
begin to give these issues much
thought. Yet many things can happen
to us in life that impact our business
and its value, well before we get to the
point where we want to retire.
Disability, Death and Succes-
sion Planning
As Financial Advisors, we know the
statistics on disability and death, yet
we fail to plan for their impact on our
businesses. 1 in 3 people, on average,
will be disabled for 90 days or more at
least once before they reach age 65.1
If your business needs to be sold
suddenly because you become
Succession Planning
A Process, Not an Event
By Marlon Richards, Maria
Lizak, and Maråty Gunderson

2. EXEMPT EDGE - FALL 2015 |17
severely disabled, or if you were to
die suddenly and your spouse is left to
sell the business, the value of your
business drops dramatically. In these
situations, you are not working from a
position of strength. Urgency and
quick actions ultimately discount the
value of your practice, thereby nega-
tively impacting your retirement plans
and your loved ones’ security. In these
circumstances, your business is
generally worth only half of what it
could have sold for, had the sale been
planned strategically and you had the
time to find the right buyer.
Therefore, it is important to plan for
disability and untimely death.
Carrying your own critical illness,
disability, long term care and life
insurance ensures there is income
replacement for you or your loved
ones in case of any of these life
events. Developing strong client
engagement systems in your business,
keeping excellent client records, and
building multiple streams of passive
income all help to increase the value
of the business to you, as well as to a
prospective buyer. A proper Succes-
sion Plan addresses all of these
possibilities.
Stages of Change and Succes-
sion Planning
Another challenging aspect of
Succession Planning is that we believe
it to be a discrete event in a person’s
life, something to be done only when
we get to retirement age. In reality,
retirement and Succession Planning
are both processes of behavioural,
emotional and mental change that we
go through. Studies of change have
found that people move through a
series of stages when modifying their
behavior: Pre-Contemplation,
Contemplation, Preparation, Action
and Maintenance.2
Similar to other behavioural changes
or transitions we choose to undertake
(e.g. changing our diet, quitting
smoking, or starting an exercise
program), the processes of retire-
ment and Succession Planning tend
to follow these same stages. While the
time a person can stay in each stage is
variable, the tasks required to move to
the next stage are not. Let us look at
what is involved in each stage and
learn how to move towards a putting
into action a successful Succession
Plan.
At the Pre-Contemplation stage, a
person is not ready to make a change
and is not planning on taking any
action in the foreseeable future, either
because they are un-informed or
under-informed. People at this stage
tend to avoid reading, talking, or
thinking about their behaviours.
In the Contemplation Stage, people
are not yet ready to take action, but
they have begun to think about it and
they weigh the pros and cons of
making a change. This weighting
between the costs and benefits of
changing can produce profound
ambivalence that can cause people to
remain in this stage for long periods
of time.
Preparation is the stage in which
people intend to take action in the
immediate future. Typically, they have
already taken some significant action
in the past year. These individuals
have a plan of action, such as joining
a health education class, consulting a
counselor, talking to their physician,
buying a self-help book, or relying on
a self-change approach. These are the
people who should be recruited for
action-oriented programs.
Action is the stage in which people
make the move for which they have
been preparing. They make specific,
overt changes in their behaviours and
in their surroundings. This stage
requires the greatest commitment of
time and energy, but may be the
shortest one. The overall process of
behavior change often has been
equated with action, but it is actually
only one of six stages. After a person
has taken action, they enter into the
Maintenance stage. At this point,
there may still be adjustments to the
new lifestyle or situation. If the

3. person has too much difficulty
accepting the changes, they may
relapse and revert back to a previous
stage such as Contemplation or
Preparation.
Although the Stages of Change model
was developed specifically in the
addictions and health and lifestyle
arenas, the concepts can apply to
processes like Succession Planning
and retirement. Many advisors have
no intention of retiring in the short
term and are unaware of the impor-
tance of developing a Succession
Plan. Another, perhaps larger, number
of advisors are aware they should do
something. But they are unsure of
what they want to do and are still
weighing the pros and cons of selling
their book, cutting back on their client
load, or taking on a Junior Advisor.
A growing number of Advisors are
beginning to prepare for a transition
by actively considering their options.
Advisors in the action stage, may be
putting up their practice for sale, or
taking on a junior associate. They may
have entered into an agreement with
another Advisor or their MGA /
Dealership on what would happen to
their book in the case of disability,
death, career change, or retirement.
Other Advisors are actively imple-
menting a succession plan based on
acquiring other books of business and
implementing new systems and
processes to increase the value of
their book before a future planned
transition or sale. A number of
advisors have looked to grow their
business by studying for their exempt
market license so that they can offer
private market alternatives to their
existing clients and attract new clients
who are unhappy with their current
investments.
Taking Action on Succession
Planning
Depending on the option you choose,
you will have varying time frames
within which to act decisively to make
sure you can effectively create and
execute a Succession Plan. As things
change with your business, the
economy, your industry and your life,
you will want to get started as soon as
possible to make sure you have at least
a plan in place that will be flexible and
adaptable enough to maintain until
you are ready to implement the plan.
Unfortunately, most Advisors are too
busy working IN their businesses,
dealing with all the urgent issues that
come up, like getting the next sale and
or keeping up with product and regula-
tory changes. In order to move beyond
merely thinking about creating a
Succession Plan, it is important to step
back on a monthly or quarterly basis to
work ON your business, putting proce-
dures in place to maximize the value of
your business both for your retirement
and for your estate. Look at your
business as a separate entity, and think
about how to maximize that business in
ways both now and as a legacy.
This advice applies equally to all Finan-
cial Advisors, regardless of your license
or specialty. Whether you are relatively
new to the exempt market, or you have
a long-established career in the private
markets, there is value to the work you
have done thus far, including the intan-
gibles like your knowledge, your
network and the systems and processes
you have put in place. This value can be
cemented, with a well-structured
Succession Plan.
Begin now. To paraphrase Stephen
Covey, it is never too early to begin with
the end in mind. Think about what kind
of lifestyle you would like to have when
you are no longer actively working in
your business and begin today. Then
one day, you will be able to say, along
with Frank Sinatra, “I’ve lived a life
that’s full, I traveled each and every
highway, and more, much more than
this, I did it MY way.”
Additional Succession Planning
Resources
Visit nbAdvantage.com to learn more
about your options and what you can do
to develop and implement your ideal
Succession Plan, and read articles like
The Myths of Succession Planning and
Retirement - Why you should retire
without Selling your Book. SobaBook.com
offers resources for advisors to help
them evaluate the current value of their
book and increase the value of their
business. They also assist advisors who
are looking to sell their practice or
expand their practice by purchasing a
book of business.
18 | EXEMPT EDGE - FALL 2015
ABOUT THE AUTHORS:
Marlon Richards is a member of National Best
Financial Network, a group of independent in-
surance advisors and financial services profession-
als working collaboratively to empower advisors
and their clients to succeed.. In an effort to under-
stand the issues better, he has been interviewing
advisors over the past year about their views on
Succession Planning. Connect with Marlon on
LinkedIn: https://ca.linkedin.com/pub/mar-
lon-richards/24/84b/771
Maria Lizak, Ph.D., is co-founder and an Exec-
utive Business Director with National Best Fi-
nancial Network. She is also a licensed Dealing
Representative with Pinnacle Wealth Brokers,
one of Canada’s largest Exempt Market Dealer-
ships. Maria holds her doctorate in Clinical Psy-
chology from the University of Saskatchewan,
where she specialized in Sense of Community and
Stages of Change. Connect with Maria on
LinkedIn: https://ca.linkedin.com/pub/ma-
ria-lizak/22/5bb/9ab
Marty Gunderson is the founder of Sell or Buy a
Book (www.SOBAbook.com). As an Advisor
with many years experience in the financial
services industry, he successfully transitioned his
own practice a number of years ago. He is pas-
sionate about helping other advisors to take a long
term view of their businesses and providing them
with the succession tools they need to complete a
successful transition. Connect with Marty on
LinkedIn: https://ca.linkedin.com/in/marty-
gunderson
1
https://www.clhia.ca/domino/html/clhia/
clhia_lp4w_lnd_webstation.nsf/resources/
Consumer+Brochures/$file/Brochure_
Guide_to_Disability_ENG.pdf
2
http://www.prochange.com/transtheoreti-
cal-model-of-behavior-change
IN ORDER TO MOVE BEYOND
MERELY THINKING ABOUT
CREATING A SUCCESSION
PLAN, IT IS IMPORTANT TO
STEP BACK ON A MONTHLY
OR QUARTERLY BASIS TO
WORK ON YOUR BUSINESS