Many financial advisors
make it a goal to work with business owners as a part of their financial practice. However, some advisors are still missing the opportunity to discuss succession planning with their small-business owner clients and prospects.
Oftentimes, within a family or small business, discussions about worst case scenarios (going out of business, death of key employee, etc.) are swept under the rug because no one wants to confront these uncomfortable issues. All the while, the business owner recognizes the need for a plan but does not act, unless he or she can get a little nudge from you in the right direction.
Did you know that 70 percent of small-business owners
think about succession planning but have not put the necessary plans in place?1
In addition to the importance of succession planning with a small business owner, the personal retirement and portfolio needs of the owner are equally as important. You should be sure to cover all the bases when meeting with the prospect about their needs. These needs can include life insurance and estate planning, as well as retirement income planning.
Think of a business owner’s needs like a railroad: One rail is business succession planning
and the other rail is retirement planning. The rails are headed in the same direction, and most business owners are going to pull into the station (retirement) unprepared to pass on or sell their business and enjoy retirement.
Mitigating Risk and Capitalizing Opportunities,” Market Facts Quarterly, LIMRA 2011.