Last month we talked about the challenge that many advisors are facing as they look at their own retirements.  Think about this: much of your career has focused on helping clients accumulate for the future and then plan for retirement.  Now as you approach that time when your retirement is at hand, there are some issues to think about that are particularly associated with being a financial advisor.

An advisor once told me: “My clients will only retire once in their life…I have already ‘retired’ hundreds of times through the work I have done with them!”

In fact, your retirement may not be like that of your clients. After all, you have spent a lot of time building visions of what retirement should look like for them and encouraging them to invest and plan for this wonderful life at the end of a long work career. It would be only natural that the optimism and picture that you created for clients on what retirement might look like would be firmly ingrained in your own thinking.

Retirement is not a “30-year weekend” or a perpetual holiday. It is just a transition into whatever you want your life to be in the future. Forget the stereotypical view of what retirement is or what you have told clients it should be.

The retirement challenges for advisors
Just think, you never have to worry about the ups and downs of the markets again or fret over where the economy is going. You no longer have to be concerned about client problems, compliance issues, staffing, etc. Now those idyllic days you spend away from your practice today can last forever without the need to return to the office.

It sounds great, right?  But think about this: what will you actually miss about the work you do?  If your answer is ‘nothing’, you probably should have given up your job years ago.  Most advisors truly like parts of what they do and will miss events such as happy client meetings, being part of a clients’ family, and seeing how you have impacted someone’s life in the most positive way.

There are always things you don’t like. However, you may have control over eliminating some of these by delegating or taking in an associate to do the work you don’t like to do.

Don’t forget the paycheck that has continued to afford you the life that you have created for your family. If you have done a good job on your own financial planning this may not be a factor in considering your retirement; if not, then it certainly has to be considered if you wish to maintain your current lifestyle. Kids in college? Vacation home? Good health and love to travel? All of these will cost you money.

Perhaps, you view your current book as your retirement nest egg? Maybe it’s time to convert your assets into a retirement annuity? Would this mean that you would have to exit the business in order to realize the value of your business?

The challenge here is that the retention rates on the average transferred book have dropped significantly in the past decade. Previously your successor could count on three-quarters of your book moving over to them; today that number has dropped below 50%, according to Spectrem Group in 2017.

Creating a meaningful plan for your own retirement
Retirement may not have to be all or nothing. This exercise may help you think differently about what retirement might look like:

  1. Divide a piece of paper into two columns. Write down everything you like about your work in one column and everything you don’t like in the second column. Is your desire to retire driven by the “don’t like” column? What is it about the “like” column that you may want to replicate in the future? Sure, you could just walk away and start a new life but research suggests that successful retirees find ways to take their strengths and transferable skills into whatever they decide to do next.
  2. List everything you look forward to in retirement, and ask yourself, “Could I start spending more time on these now and still continue being an advisor?” If your retirement vision is “more freedom”, how much of that could you create today?
  3. List everything you could do that will give your life meaning. We tend to think of the fun things we can do in retirement, but the most important activities that we can undertake can be characterized as “fulfilling” or “meaningful.” As an advisor, you have often satisfied these two pursuits through the work you do.

Having your cake and eating it too!
Once you have reflected on all the above, consider whether you can do both. If your health is good, why not delay your official exit and develop a meaningful transition plan in the interim that serves both you and your clients?

You may choose to take on a new role, such as business development or “advisor emeritus” while keeping just a few of your clients. After all, one of the most important parts of your business is the good will that you have created, and it is important to clients, new owners, and the success of your business to keep your name involved.

The bottom line: Discard that old view that retirement means “no work” and choose to use your practice as a way to give meaning to this next phase of life. Do it on your terms and remember that your retirement is what you want your life to be!

Last year, Heather Hooper introduced this Retirement Checklist for investors, but you may find it helps you as you plan for your own retirement — especially if you have your spouse fill it out separately and compare notes. It’s a great conversation starter!