Succession Planning versus Continuity Planning
Most people confuse continuity planning with succession planning and vice-versa. Broadly, they both seem the same because succession planning does provide continuity planning. But at its core, they have 2 different objectives (and they are 2 different things).
The objective of succession planning is to develop the next generation or to ensure an orderly transition to a new firm (via acquisitions, mergers, partnerships and so on). Most people think of this as they age.
The objective of continuity planning on the other hand is to protect the value of the business in case of death, disability or incapacitation. There is no age for this. You don’t have to wait till 50 or 60 or 70 to do this. Every firm needs this as of yesterday. A continuity plan is your business life insurance.This should be done with a world class partner with the best tech and the best humans (hint – HF; by the way, we do succession planning as well).
Table showing the difference between Succession Planning and Continuity Planning
I believe it’s now clear to you that continuity planning is different from succession planning.
An additional benefit of having a great continuity plan is that it ensures a smooth succession when the timing is right.
It’s thus the need of the hour.
However, the irony of this is as follows – just like their clients (who don’t want to buy life insurance because they don’t think they are going to die), many distributors and advisors too don’t want to confront their mortality or plan for their future.
Therefore, many don’t end up doing anything about it.
If you too don’t have a continuity plan in place, the question you need to ask yourself is – What am I waiting for?
Did you get a convincing answer?
Chances are the answer is NO.
Try answering this one now. I am sure you will nail this.
What do you think happens when a person dies without any life insurance?
Besides the deep personal loss, the family will get nothing (except personal savings and investments) from life insurance. They had no protection.
What do you think happens then when a distributor /advisor dies without business life insurance?
While your clients will miss you, they are likely to move away. Your dependents likely won’t be able to add much value beyond a point. This is likely to immediately depress the value of your practice. Buyers if any will only pay a heavily discounted price. This has been the experience in most global markets. It will be the same here if not worse.
A world class continuity plan protects you from these massive losses. It signals to your clients that you care. It protects your relationships with your clients and team members. Additionally, it not only protects the equity value of your firm but also increases the value of your firm if done with the right partner.
Just like your clients need life insurance, so do you need business life insurance. There is no real debate about it.
Don’t test your luck or behave like the person who didn’t buy life insurance despite the desperate need for it.
Just make sure you do something about getting one in place soon.
If you don’t intend to have one, Why Not?
Choose all that apply:
a. Difficult to find the right firm or partner
b. Don’t know how this works
c. Don’t have time
d. Too much work
f. Don’t see the benefit
g. I am going to live forever.
I am interested to know your answer.