You’ve been in the industry for many years and have survived good markets and bad. Because of your excellent work, your clients have managed to both keep and increase their wealth. Presumably some of your best investment advice occurred when you talked clients out of foolish investments and put them into something better and more secure— Exxon, for example, as opposed to Lex, a small company which had discovered Kryptonite and was trading on the Pink Sheets at a bid of 2 ½ and ask of 4 ¾. 

You have handled your responsibilities in an honorable way and have a loyal client following. Could something be missing? One big thing: what happens if you die? Not twenty or thirty years from now. I mean now. Today. This weekend. This month. This year. Odds are this won’t happen to you but it does happen to people and happens when they least expect it. 
“A Duty of Care” is a legal requirement “…that a person act toward others and the public with watchfulness, attention, caution, and prudence that a reasonable person in the circumstances would.” * 

We at Cannon are not attorneys and are not giving legal advice nor are we suggesting that you as an FA will be in breach of your “duty to care” if you lack a succession plan.  We are only asking you to consider if you have a moral obligation to your clients to ensure there are competent people who know your clients and will be able to fill your place should the worst happen.

Another issue is retirement. “I’m never retiring.” This is a common refrain I hear from FAs around the country. But few of us can be Seth Glickenhaus, a Wall Street legend who began working on “the Street” before the Crash of 1929 and managed investments until he died in 2016 at age 102. **  So, the biggest issue with “I’m never retiring” is life interference. Perhaps you develop a health problem. Or you live in Anchorage and finally decide to move someplace warmer like Mexico. Or you have sent three of your children to a college in Pleasantville which is a thousand miles away. They like the place. Who wouldn’t? Everyone is pleasant. They stay there.

Your three children eventually accumulate five grandchildren whom you dearly love. Unfortunately, traveling to Pleasantville is a pain in the neck. You must change planes once or twice and it takes nine hours to get there and you are exhausted when you arrive.

One day you decide you want to spend more time with your grandchildren and the easiest way to do this is to retire and move to Pleasantville. So, you do. Yet what happens to your clients? Do you send them a YouTube vid of you and your grandchildren in Pleasantville waving at the camera while you say, “goodbye, everyone. Sure enjoyed it!”  Or perhaps you write them an email and say, “good luck, you’ll need it,” with a smiley face emoji?

Or have you hired younger people over the previous years and brought them into client relationships? Perhaps you have even slowly withdrawn from all but the most significant aspects of dealing with a client’s wealth. Because of your foresight the handoff is seamless.

You can retire knowing you have left your clients in good hands with people they already know and whom you personally have thoroughly trained. Your clients, by the way, will be well aware if there is no one to step into your place.

We end by suggesting you think about whether you have a moral “duty of care” to your clients or whether “you could care less” what becomes of them when you leave the stage.

To learn more about this topic, register for our Certified Wealth Strategist program of study.

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Resources:

[*] http://legal-dictionary.thefreedictionary.com/duty+of+care

[**] http://www.wealthmanagement.com/people/seth-glickenhaus-investor-eight-decade-view-dies-102

Contributing Writer: Subject Matter Expert Charles McCain