EVERYTHING YOU NEED TO KNOW ABOUT SUCCESSION PLANNING
Whether you plan to pass your business on to the next generation, sell to a third party, retire or something unexpected happens, learn about all the components necessary to prepare your business transition plan.
Succession planning is a process for identifying and preparing people to take on leadership roles in a business when they become vacant. While this may seem straightforward, it can be a more complicated and nuanced process than it appears. Just ask Chartered Financial Consultant (1998) and Chartered Life Underwriter (1996) John Vandereerden.
“I started working on my succession plan in 2017 because I was not only concerned with retirement, but more importantly, I was concerned with becoming disabled or passing away unexpectedly,” he recounts. “My successor would need to be someone that is comfortable and highly qualified to deal with wealthy clients on day one. I had discussions with several other advisors and even considered a succession plan with our licensing company, but they all had major drawbacks.”
So, Vandereerden approached Paul Dufour, President and Founder of Breadth Consulting Inc. and Co-Founder of The Benefits Centre. The two got to know each other over a five-year period before finally putting the plan on paper in April 2022.
“Paul is honest, competent, and absolutely qualified to take care of not only my family, but my clients as well,” expresses Vandereerden. “While I have no plans on retiring anytime soon, I still must be prepared for any unexpected events that might happen. Working at Breadth Consulting as an Associate Advisor and the processes and staff we have in place have improved my practice, as well as my clients’ financial planning experience.”
Dufour adds: “I have made it my focus to attract Financial Advisors like John who aren’t necessarily looking to retire today, but want to know that when they wish to retire, or should an unforeseen event occur, that they have an exit strategy. I have done so successfully with other advisors and two years ago acquired a London-based company which was also looking for a succession plan. Younger entrepreneurs like me have a ton of opportunities, not only to grow organically, but to grow through acquisition and succession planning. It’s all about positioning and being able to adapt.”
LET’S START WITH THE FINANCIAL ASPECT
Some of the benefits of a succession plan include; lower recruitment and training costs, minimized downtime, risk mitigation, enhanced employee morale, protection against unexpected events, strategic focus, generational planning, improved liquidity, and market confidence.
“A solid succession plan signals stability and future growth, while attracting potential investors and increasing the company’s valuation,” Dufour comments. “It can also facilitate a more efficient sale of the business (ensuring a better return on investment) and can be integrated with estate planning strategies to minimize tax burdens on the business and its owners.”
Sudden loss of key leadership in a company without a succession plan can lead to a leadership vacuum (if no designated successor it might mean confusion and uncertainty among employees, customers, and suppliers), generational disruption, loss of key talent, decreased valuation, increased costs, reduced revenue, family feuds, complex tax implications, delayed decision-making, missed opportunities, and negative publicity.
Started in 2010, Breadth Consulting Inc. provides mutual funds, segregated funds, Guaranteed Investment Certificates (GICs), Guaranteed Interest Options (GIO), annuities, group pension plans, group benefits, charitable giving accounts, life insurance, disability insurance, and critical illness insurance.
The company employs 10 advisors and four staff and operates out of two offices: 1608 Sylvestre Drive, Unit 5 in Tecumseh and 759 Hyde Park Road, Suite 253 in London.
“I specialize in holistic wealth management, which is a modern and strategic approach to financial planning that ensures your financial plan adapts to your life goals and future aspirations,” explains Dufour. “Our advisors take the time to learn and understand each client’s unique situation, from every angle, to create a custom wealth plan that integrates and coordinates all aspects of your life.”
When making a succession plan, Breadth Consulting Inc. assists their clients with preparing their own wealth business plan so they can see clearly what is in front of them (positives, negatives, other issues, and so on) to help them build the correct succession model.
