Now more than ever, owners of privately held companies need to take swift action to ensure their primary leaders are feeling secure and happy with well-defined roles, whether they are family members or not. Having a generational succession strategy that’s well implemented helps owners sleep better and improves the likelihood of growing stronger adviser relationships, but only when those advisers are closely involved in the process.

The risk advisers have of losing clients in the process of a family business succession is very real, which is why it’s important to understand what your clients are going through and what they need from you. For owners of family businesses, it all starts with open and honest communication and family business governance.

Learning the basics of family business succession and what you as an adviser can do to help the process along will help you retain and grow your family business clientele. Generational transfers can be complicated and time consuming, yet the vast majority of privately held companies in the US are family owned, so it’s imperative that we can advise at least on a basic level. Part of our job as professional advisers is to know who’s involved in the process of family business succession and to establish strong relationships with the other professionals who are needed on the team, doing so well in advance of the transitional event.

Many small business owners have plans to carry on their legacy as their optimal exit option but need to understand that it takes more than a wish to make that happen. When leaving a legacy is the goal, the pillars of a strong company culture with core values that drive every decision are the pillars that a successful transition requires. In addition, having strong governance in place will increase the chances that the company will thrive for many generations to come.

In my WIFS Education Webinar on this subject, I talk about some of the common pitfalls that occur when owners of family business are missing a succession strategy, and key people are not formally retained.

Julie Keyes is a Certified Exit Planning Adviser and the founder and owner of KeyeStrategies, LLC. She presented the WIFS Education Webinar “Generational Succession Planning and Retaining Key People” on December 9, 2020.

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