Secure it with a succession plan

Financial advisors, by and large, are sharply focused on planning properly for their clients, but often they don’t do enough planning for themselves and their own practice.

That irony first surfaced in a 2015 Fidelity Registered Investment Advisor Benchmarking Study that found while most firms (59 percent) preferred an internal succession, only 27 percent of firms had a next-generation owner in place or designated.

The situation, in fact, has been exacerbated by the pandemic, with many older advisors considering exiting their practices. And it has been compounded by an aging financial advisor profession in which the average age is between 51 and 55 years old.

The trend is upsetting to Christina A. Nash, CFP® and founding partner of Knox Grove Financial, LLC of Pennington, New Jersey. She places a high value on succession planning.

“Something that has been really important to me as an entrepreneur has been succession planning,” Nash told Advisors Magazine in a recent interview. “When you look at the statistics in our industry of those that do not have a succession plan in place, that disturbs me.”

At the age of 43, she hired a company to help her develop a succession plan for Knox Grove Financial and the consultants told her she was among their youngest clients ever to do so. But it was important to Nash to get a succession plan in place for her company.

“I hope more and more advisors become aware of this, particularly with the level of advisors that are retiring,” Nash added. “Advisors need to focus on a succession plan, and that’s what we’ve done at Knox Grove,” she said. “We have advisors in training and a wonderful team in place, which is something that has brought a lot of value to me—knowing that my clients will be taken care of should something happen to me, and for my older advisors, as well—that there is a plan in place.”

Nash’s diverse, six-person team offers holistic financial planning without being solely fixated on extremely high net-worth clients. “I feel that my team and I get more reward from working with everyday, main street type of clients,” she said.

Nash explained her team likes to focus on the whole client, mainly because the number one reason most people leave their advisors is because they never hear from them.

“And that baffles me, because it’s one of the easiest things to do,” Nash emphasized. “Communication is the core service philosophy,” she said. “We communicate with our clients on an ordinary, sustainable level to where they know that we are always here for them and we are always very proactive in their lives.”

Nash said that given changes in policies and regulations, Knox Grove is constantly reaching out to clients. Last year with COVID, the team spent a lot of time on the phone—not emailing, she stressed.

“Sometimes, emailing is great, but there are times when clients just want to hear your voice,” Nash noted. “We call our clients, we reach out, we pick up the phone and we provide them with ongoing resources.”

Another key philosophy is making sure clients are comfortable with their investments. But Nash said it’s not solely about investing. It’s about how those investments fit into an individual’s overall financial plan.

“We are not just portfolio managers, we are CERTIFIED FINANCIAL PLANNER™ professionals,” she said. “We work with the client on identifying their goals and how to reach those goals; we dream board it with them.”

Nash continued: “And when you do that, oftentimes you can explain to the client during periods of volatility, or something like COVID—’Hey, we anticipated this, and we will get through this and even with this, you’re still going to reach your goals.’ Having that plan in place has been key in getting clients through this pandemic.”

In addition to her Bachelor of Science in Finance from Florida State University, Nash has a Master of Education from the University of South Alabama, and early in her career she was a teacher and volleyball coach at her old high school. As a result, education has long been a mainstay at her independent financial practice.

Nash believes that education allows clients to see why she and her team are in their lives and the value that financial advisors provide—so they can understand what they have from an investment standpoint and why they have it.

“For example, right now we’re doing a financial challenge for clients and others in the community,” Nash said. “It’s a 30-day challenge in which they learn and have weekly steps that they must complete to succeed in the challenge.”
And at a time when online trading platforms, apps and robo-advisors are challenging financial advisors, Nash is a big fan of the trend.

“I think robo-advisors and the online trading platforms are wonderful because they are bringing the younger generation into investing early on,” she said. “It’s creating a savvy investor, long-term and hopefully that will actually combat the issue we’re having with the lack of savings in this country.”

Nash has a message for financial advisors afraid of such industry change: “If you’re an advisor who thinks a robo-advisor is a scary thing, who sees the trend threatening your profession, then I think you’re in a situation where you’re not doing enough for your clients — ask yourself if you’re providing real value.”

For more information on Knox Grove Financial, visit: knoxgrovefinancial.com

Securities and investment advisory services offered through Royal Alliance Associates, Inc. member FINRA/SIPC. Royal Alliance Associates, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Royal Alliance Associates, Inc.