You know the signs. You’re meeting with one of your very best clients—a CEO, business founder or perhaps an entrepreneur—to have a serious conversation about business succession. No doubt about it, ambivalence is in the air. While your client may pay lip service to business continuity with a new generation of leadership, he is struggling. How can the business that has been the center of his life for so many years go on without him?
Here’s an even more daunting question: What will this successful, intense workaholic do with himself once he walks out the door?
If you were to ask what his plans are, chances are you’ll get one of two responses. Either he will turn the conversation back to the business to avoid the personal implications with a gruff, “This is not about me,” or he’ll say something even worse, “We already have a place in the desert (or Florida or the islands) and I’m just going to play a lot of golf.”
These answers fly in the face of very real fears. Everyone who makes it to the pinnacle of business success knows these apocryphal stories, like the one about the hard charger who retires to a luxurious resort enclave and promptly dies. How about the failing CEO who stays too long and makes a fool of himself when he finally exits? Whether your client admits it, it is a safe bet these stories are on his mind.
The CPA financial planner’s role in this can be pivotal. As the professional who has often been the most trusted source throughout this client’s career, your thoughts and opinions matter. In fact, you may be one of the few financial advisers in a position to ask your client the critical questions.
With years of working with retiring executives, I can tell you this: what we’ve been taught about business succession planning is backwards. If we want to put “success” into “succession,” we need to put the retiring CEO first. Whenever a retiring CEO moves out gracefully and with goodwill, the business, more than likely, will continue to thrive. Engineering this may be more important than figuring out who will sit next in the leader’s chair, but it happens only when the retiring leader has a plan and a place to go.
Not just any plan will do. For someone who has labored intensively for many years at work they love doing, a simple plan for leisure seems hollow. Rather, these aging titans would prefer to find a way to continue being who they already are: leaders.
What does that mean? Certainly not staying in the current position holding on for dear life! Instead, the leader should be challenged to find new ways to put passion, skills and resources to work. And you, as someone the leader trusts and respects, can help that dialogue begin.
It is more of a conversation, really. Are you comfortable asking your client questions for which there will be no right or wrong answer—questions that are probing and personal? Here are three that I have found provide poignancy and insight:
- What, in life, would you like to do-over?
- Can you describe your proudest moment?
- What makes you sad or afraid?
Frankly, these are the kind of questions we should all ask ourselves as we think about the years ahead, because they speak to the things people care most deeply about, and deep feeling is most often the basis for positive new direction. Consider these questions as a launching point for the many more questions that will need to be asked along the way to a successful retirement.
I am not suggesting that finding a new direction, particularly when it involves leadership, is a simple task. There are many who never actually figure it out. Brett Favre is a classic example of someone who had trouble letting go and difficulty finding out what’s next. Derek Jeter, on the other hand, demonstrated grace and care with his thoughtful exit from the Yankees. One thing I know for sure: If you ask your clients whether they would rather be Favre or Jeter when it comes to their own retirement, they’ll pick Jeter. Wouldn’t you?
In a future article, in order to help provide even more insight into this topic, I’ll discuss the previous three questions in depth. For now, here’s the challenge: Will you, as your clients’ most trusted adviser, step up and ask them the difficult and deep questions? I hope you will. Any computer program can tell your clients if they have enough money to retire, but only a true advocate can talk about what that retirement might mean. Let that advocate be you.
About the Author
Kaycee Krysty, CPA/PFS, is an author and a blogger. Happily retired, she writes about aging and the search for personal legacy. Read her blog, The Legacy Maven
, and check out Wealth Regeneration at Retirement
, co-authored with Robert Moser and published by Bloomberg in 2012. Prior to her retirement, Kaycee was CEO of one of the largest privately held wealth management firms on the west coast. Contact her at email@example.com
PFP Section Retirement Resources
If you missed Kaycee Krysty’s presentation, “Retirement at the Top: Dealing With the Unique Needs of CEOs, Business Owners and Entrepreneurs” during the Advanced PFP Conference in January, audio recordings and presentation materials are available in the AICPA’s online library
. Registered attendees for the 2014 conference have complimentary access when they log in through the website (see instructions
to access). Those who did not attend can create an account
to purchase audio recordings and presentation materials.
PFP Section members, inclusive of CPA/PFS credential holders, have access to many retirement planning related resources. The CPA’s Guide to Social Security Planning
and The CPA’s Guide to Financing Retirement Healthcare
give practical examples in these complex areas. The Retirement Planning Resource
page includes these guides as well as information on Roth IRA conversions, safe withdrawal rates, long-term care planning, and more. Forefield Advisor
provides clear and concise consumer-oriented materials on many of these topics with special resource centers for Social Security and healthcare reform.
“Retirement Planning: The Next Phase of Life” was held in September 2013 and was part of “CPA/PFS Perspectives,” a multi-part series of webcasts with previously archived topics on growing your practice, offering investment services, and much more. Access the CPA/PFS Perspectives
web page for a complete listing of all sessions, including a link to the audio recording and presentation materials for the retirement planning panel discussion.