The Ad­vi­sor’s Re­tire­ment Blues

Wind­ing down a long and suc­cess­ful ca­reer of­ten comes with angst. Fol­low these steps to make the process a lit­tle bit eas­ier, Bob Veres says.

Financial Planning - - CONTENT - By Bob Veres

Wind­ing down a long ca­reer of­ten comes with angst. Fol­low these steps to make the process a lit­tle bit eas­ier.

AS A NEW YEAR BE­GINS, LET’S TAKE THE OP­POR­TU­NITY to as­sess one of the more painful trau­mas ad­vi­sors face in their ca­reers — re­tire­ment.

It’s prob­a­bly safe to say that when most suc­cess­ful ad­vi­sors started grow­ing their busi­nesses, they had no idea they were cre­at­ing some­thing that would be so de­mand­ing of their time and en­ergy.

But as they grew ac­cus­tomed to the long hours and never-end­ing mind share, they prob­a­bly didn’t re­al­ize quite how messy things would be­come as they came closer

to the end of this long process.

The thought of scal­ing back and giv­ing up day-to-day re­spon­si­bil­i­ties feels to them as if they’re cut­ting out a part of their lives, tak­ing their sta­tus and self-im­age with it.

On top of that is the same kind of angst a par­ent feels when the nest is about to be­come empty; your baby is no longer yours, and the po­ten­tially life-al­ter­ing de­ci­sions are no longer com­ing from your re­serves of wis­dom and ex­pe­ri­ence.

A whole gen­er­a­tion of founders is learn­ing to face co-de­pen­dency angst in their di­min­ish­ing re­la­tion­ship with their firms. The is­sues that I’m hear­ing the most about, some of which are out­lined here, are not so eas­ily re­solved:

Af­ter hav­ing pushed so hard for two or more decades, I feel like I’m cheat­ing when I’m not go­ing full force and ac­tu­ally want to en­joy life a lit­tle more. What kind of role will I have? Will I be a big-pic­ture thinker, or a men­tor, or will I con­tinue in an ad­vi­sory role and let client at­tri­tion grad­u­ally di­min­ish my work­ing hours?

What should I be paid as I trans­fer own­er­ship and re­spon­si­bil­ity? Noth­ing? My cur­rent salary even though I’m work­ing less? Profit dis­tri­bu­tions only?

What will I say to clients as I ease out the door? Will they re­gard it as suc­cess that a part­ner is re­tir­ing, or a be­trayal be­cause they, them­selves, are still work­ing? How do we han­dle un­equal de­sire to work among the se­nior part­ners? Of course, ev­ery firm and ev­ery founder will come up with unique an­swers to these ques­tions. But it might help to have a frame­work for think­ing them through.


Start by tran­si­tion­ing your role from a doer and daily grinder to some­thing else. I be­lieve founders can be­come more valu­able as they ex­change the nitty-gritty la­bor as­pect of the

Founders can be­come more valu­able as they ex­change the nitty-gritty la­bor as­pect of the job for big­ger-pic­ture guid­ance on the di­rec­tion of the firm.

job for big-pic­ture guid­ance on the longert­erm di­rec­tion of the firm, and look to­ward men­tor­ing the tal­ent they’ve ac­quired over the years.

Think to your­self: Does the firm ben­e­fit more when you work with a valu­able client, or when you spend that time help­ing a half­dozen younger ad­vi­sors be­come part­ners and rain­mak­ers who can at­tract and tend to a hun­dred new clients each?

I also be­lieve that un­equal re­spon­si­bil­i­ties at the top can be han­dled just as you cur­rently han­dle the rest of the or­ga­ni­za­tional chart. Founders and part­ners tend to think of them­selves as equals in ev­ery way. But as they start to take on dif­fer­ent kinds of work­loads, it makes more sense to sep­a­rate their eq­uity from their di­verg­ing roles.

What does that mean in prac­tice? Each part­ner should re­ceive a part­ner­ship dis­tri­bu­tion in pro­por­tion to his or her own­er­ship. These profit dis­tri­bu­tions do not — and should not — im­ply that any work on the part of the owner must be done.

Af­ter all, if we all own shares of Ap­ple, we then feel en­ti­tled to a share of the com­pany’s earn­ings. But do we also feel ob­li­gated to show up to work in the com­pany of­fices?


Now let’s turn to the other el­e­ment of com­pen­sa­tion. In terms of salary, each staff mem­ber is paid ac­cord­ing to the value they pro­vide, right? Why shouldn’t that gen­eral for­mula also ap­ply to the found­ing gen­er­a­tion as they take on new roles?

The part­ner who checks into the of­fice once or twice a week on the way to the golf course would re­ceive a pro­por­tion­ately lower salary than the part­ner who is work­ing with younger ad­vi­sors and work­ing in a hands-on ca­pac­ity 40 hours a week.

The salar­ies can be de­ter­mined in some fair and ob­jec­tive way, and this is also a great way to re­duce the guilt fac­tor for those founders who are cau­tiously test­ing out a new work-life bal­ance while their part­ners are still en­gaged.

Fi­nally, my rec­om­men­da­tion is not to skulk out the back door as you slowly shift client re­spon­si­bil­i­ties.

In­stead, in­clude clients in a glo­ri­ous cel­e­bra­tion of re­tire­ment. Plan­ners who live a long, pros­per­ous life and en­joy great out­comes from their own plan­ning should nat­u­rally en­joy more cred­i­bil­ity than those who are mired in drudgery, who never seem to achieve for them­selves the same great life they are hop­ing to fa­cil­i­tate for their clients.

If the firm is re­tir­ing its prin­ci­pals to a great next phase of life, how much more can we be­lieve it knows how to achieve that for the rest of us?

I sus­pect that these re­tire­ment cel­e­bra­tions, or even the dis­clo­sure that your years of plan­ning and dis­ci­pline have led to an op­ti­mal work-life bal­ance, can ac­tu­ally be­come a mar­ket­ing ben­e­fit and new source of client re­fer­rals.


What’s the so­lu­tion to the feel­ing that you’re no longer Mr. or Ms. Suc­cess­ful Firm Owner, or that the firm you’ve lov­ingly nur­tured will be guided into an un­cer­tain fu­ture by peo­ple whom you first met only five or 10 years ago?

Over the years, I’ve learned that the most dif­fi­cult, com­pli­cated ob­sta­cles in life are those we man­u­fac­ture for our­selves.

The pro­ce­dural chal­lenges to a suc­cess­ful re­tire­ment are much more eas­ily re­solved than the guilt that so of­ten ac­com­pa­nies the let­ting go of sta­tus and re­spon­si­bil­ity.

Know­ing that nav­i­gat­ing the tran­si­tion to re­tire­ment has been a chal­lenge for your clients is no con­so­la­tion when you ar­rive faceto-face with it your­self.

For the men­tal part, you’re on your own — but not with­out re­sources. Tell your­self what you’ve told your clients: The new life has to be planned for just as the old life was, and you have to de­velop dif­fer­ent sources of joy and sat­is­fac­tion.

Ad­vi­sors can cure the co-de­pen­dency they’ve de­vel­oped with their firms by us­ing the same skills they use on their best days with their best clients.

The pro­ce­dural chal­lenges to a suc­cess­ful re­tire­ment are more eas­ily re­solved than the guilt or sep­a­ra­tion anx­i­ety that of­ten ac­com­pa­nies let­ting go of sta­tus and re­spon­si­bil­ity.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.