Kayla Tausche CNBC

y felix badea
Finding One’s Own
SUCCESSOR
It seems a bit like the cleaning lady whose house is a
perpetual mess, and yet according to a recent survey
of financial advisers, only 11 percent of those whose
livelihood comes from helping others are actually
following their own advice regarding the importance
of identifying and grooming their own successor.
Eric D. Brotman, president and
managing principal of Brotman
Financial Group based in
Timonium, Maryland, is a member of
that wiser 11 percent.
“I was the sole owner of this firm
when I started my own succession
planning by selling ten percent of the
interest in the firm to another CFP®
who had been with me for eight
years,” Brotman said.
A couple of years later,
Brotman sold five percent to
another employee – the COO
who had been with the firm for
11 years. This move made him
an 85 percent owner, but has
also assured him that the process
is well underway for a smooth,
seamless succession when he
retires.
He takes the concept of
succession well past his own
replacement, applying it to the
employees of the firm and the respective
clients for whom each employee works.
“One of the things we have been very
successful at building is an ensemble
type firm with a team approach, where
all of our clients have access to multiple
advisers,” Brotman explains. “We have
been highly successful in transforming
young people into excellent advisers
who are technically and incredibly
proficient and – this is key – they are
younger than our clients, which means
these advisers will be around when
our clients need them the most, in their
retirement years.”
This type of far-sighted planning puts
Brotman, his firm, its employees and
its clients far ahead of other financial
planning groups. That same survey,
conducted by Signator Investors and
reported by Insurance News Net, not
only indicates that a mere 34 percent
of financial advisers report they have
some sort of plan in place for their own
replacement, but also that they have
not completed its implementation.
Admittedly, it is a painstaking, costly
and time-consuming process to create
a succession plan and identify the
appropriate successor. But as pointed
out in the Wall Street Journal, those
advisers who fail to do so risk having
their firms sold to larger
conglomerates and traditionalstyle
banking operations now
offering financial advising. This,
the WSJ contends, undermines
the more personal culture that
firms such as Brotman’s strive
to achieve for their clients.
That more personal culture
at Brotman Financial includes
the use of very simple
models for planning and
retirement hypotheticals.
“The goal,” Brotman said,
“is to make financial goals
readily understandable and quickly
customizable so that plan modifications
can be ‘made on a dime.’ ”
Brotman is a big believer in risk
modification.
“We believe very firmly that you
have to dig the moat around the castle
THE SUIT MAGAZINE - JAN 2015