While many financial advisors lack a formalized succession plan for someone to take over their practices when they retire, others have turned to their children as successors.
In 1993, when Wesley Simons wanted a unique name for his financial services firm in Brampton, Ont., his thoughts turned to his three small children, Collin, Peter, and Nicole. He immediately had the answer: CPN Financial Services Ltd., named for each of his offspring. He had no expectations that any of them join his business, but today, it turns out Mr. Simons and his three children all work as wealth management and insurance advisors in the family firm.
Growing up, the Simons kids got their first taste of the family business when they assisted their father with filing and other administrative tasks.
“[Kids] should start in the administrative area for a period of time so you can see if they are well suited for the business,” Mr. Simons says. “It also will help them decide if this is something they actually want to do.”
Collin also recalls clients coming to the family home to meet their father.
“We would observe how our dad interacted with them,” he says. “You could say we were being groomed before we were officially in the business.”
Still, after post-secondary education, the Simons kids all pursued other occupations before becoming advisors. Collin worked in wireless sales, Nicole was in corporate finance, and Peter became an elementary school teacher.
Peter’s attraction to the financial advice industry came down to a drive to help others. He was the first to join CPN Financial Services in 2002 and was recently appointed the firm’s chief executive officer.
“Teaching really helped me with advising because it gave me the patience and the skill set needed to sit down with prospects and help them achieve their financial goals,” he says.
Nicole was drawn to how her father helped his clients – often visible minorities other advisors ignored – increase their overall net worth and create more intergenerational wealth. Now, the children of Mr. Simons’ clients contact her and her siblings for financial guidance thanks to their father’s impact.
“It’s always nice to have the children of my dad’s clients call me for financial advice,” she says.
Collin liked that Mr. Simons was his own boss because he could set his own schedule and be flexible, splitting his time between work and family matters.
A flexible schedule also attracted Sara La Gamba to the advice business, as she remembered her father, Vince La Gamba, spending more time with the family once he became an advisor as a second career.
After a decade of serving clients, he started thinking about a succession plan. He thought Sara could be a possibility as they both have outgoing personalities. But first, Sara needed to understand that a flexible career still meant a lot of hard work.
“My dad wanted me to see what the business was really like,” says Ms. La Gamba, a senior advisor at SPM Financial in London, Ont. “He wanted me to prospect actively and do the things he had to do to be successful so I would succeed in the long term. It does take a certain type of personality and hard work to excel in prospecting, reaching out, and networking.”
Mr. La Gamba also recommended to his daughter that she obtain some professional designations.
“She was right out of university and some clients might perceive her as not knowing what she was talking about,” Mr. La Gamba says. “Designations would help her to be seen as credible.”
Ultimately, over the course of a decade, Sara earned her certified financial planner (CFP), chartered life underwriter, certified health insurance specialist, and trust and estate practitioner designations.
Ms. La Gamba shadowed her dad in every client meeting for six months, and she learned how to interact with clients and manage discussions.
In turn, Mr. La Gamba learned to embrace new ideas from Ms. La Gamba, mainly about how to integrate more technology with managing clients.
“We respected each other’s styles but what remained were the core values in how we serve clients – with honesty, integrity, and respect,” he says.
The actual succession process took 10 years, with Mr. La Gamba doing the final handoff to Ms. La Gamba in 2018, when he officially retired.
“Succession should not happen overnight,” she says. “You have to put the time in because developing the client relationships is so important. You can’t rush that kind of transition. People needed to be comfortable with me as the new advisor.”
Children who succeed their parents in an advisory business also need to do it for the right reasons. Rob McEachern, a chartered financial consultant at McEachern Financial in Barrie, Ont., has seen too many situations in which advisors bring their children into the business because they don’t have other job prospects. “It doesn’t work out too well,” he says.
Ten years ago, his son, Scott was no longer liking his two jobs in Western Canada and expressed interest in joining the business. Mr. McEachern was hesitant.
“While he knew about the type of work I did, I wanted him to be sure this is what he wanted to do,” he says.
Like Ms. La Gamba and Mr. Simons’ offspring, Scott did administrative work and attended some client meetings as an observer.
“The meetings were what drew me in, seeing that we were able to have a larger financial impact on families,” Scott says.
He had a business degree and worked to get his CFP designation, but still had to learn how to prospect for new clients.
Mr. McEachern advised Scott to call his friends, let them know about his new position, and arrange some meetings. Twenty minutes later, Scott asked his dad what to do next. At first, he thought Scott didn’t understand the assignment, but in reality, Mr. McEachern didn’t understand the power and speed of technology.
Scott had sent out some texts and had managed to book seven meetings.
He used his technology and social media savvy to build up a practice of millennial clients. The firm redesigned its website to focus more on family intergenerational planning.
Mr. McEachern says when they first started working together, some older clients didn’t want to work with “somebody that young.” But in the end, they came around.
“We always emphasize it being a team approach, and a lot of people now are used to meeting together,” he says. “Scott is part of the formula now.”