Philip Palaveev

If you think you ’ ve got a successor for your business , ask yourself these questions first .

ET ’ S PLAY 20 QUESTIONS ! YOU KNOW THE GAME . I WILL ASK you 20 “ yes ” or “ no ” questions and , based on your answers , try to guess who the person you have in mind is .

Who is it that can retain your existing clients , contribute to growth , lead and manage people , take responsible risk with capital and has a character of unquestionable integrity ? Ideally , it ’ s your successor . Succession is difficult for business leaders and even more so for company founders . Everything in their nature that has made them successful in the past is now working against them . The tendency to obsess over the business and the clients , the desire to control every little detail , the instinct to take on every challenge and internalize every problem , the rush to be first to do something that needs to be done , the longing to be the clients ’ most trusted advisor — all these are qualities that help an advisor build a great practice and all will torpedo her or his efforts to groom a successor .

I used to joke that training a successor to work with your clients is like watching someone dance with your spouse . It should be OK . But it just does not feel right .

What ’ s more , company founders — I am one , too — tend to often second-guess their choice of successor and wonder again and again if they have finally found someone who is ready for that dance . But it ’ s kind of funny what your standard of “ ready ” will be when you ’ re discussing an internal sale . It ’ s often impossibly high . Yet when you ’ re talking about selling your business to a third party instead , suddenly these successors who weren ’ t good enough become superstars .

So I found myself wondering : “ What is the test for a successor ?” If I had to create a scorecard , what would it look like ? What are the 20 “ yes ” or “ no ” questions that I would ask to know if my successor ,

DECEMBER 2024 | FINANCIAL ADVISOR MAGAZINE | 19