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The firm’s next leader may already work there

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There are different ways to transition the business, and one way might be closer than many advisers think.

The key to succession planning for many firms might be to identify advisers already working there who can be trained to become the next generation of leaders.

Among the handful of firms providing training is Charles Schwab & Co. The company since 2014 has operated an executive leadership program, the first of its kind, that focuses on preparing experienced advisers and leaders of registered investment advisers to become the next generation of firm leaders.

“It’s a one-year program, very high-touch,” says Lisa Salvi, vice president of business consulting services at Schwab Advisor Services in San Francisco. “We combine live in-person events for the participants with guided coaching from Schwab.”

The curriculum focuses on positive leadership, innovation, talent management, marketing and entrepreneurship, Salvi says.

Courses feature faculty from well-known universities.

“Most of the program is online and very interactive,” Salvi says.

“The program interacts with smaller groups of participants and alumni and also at what the firm calls the ‘keystone,’ or beginning of the program, and ‘capstone,’ or the end of it when they graduate,” she says.

The leader of the firm nominates someone else who they think can become a leader.

Schwab expects to have trained a total of 140 next-generation chief executives by the end of the year.

“We’re committed to helping advisers find and develop talent at all levels of the leadership program, which is designed specifically for that CEO successor,” Salvi says. “From stories of our graduates, we feel the industry is in good hands.”

Graduates say the Schwab program has helped their subsequent leadership performance.

“There were numerous takeaways. And the one that resonated most was ‘to be intentional’ about your leadership and the decisions you make in your organization,” says CFP J. Brent Beene, a managing partner and wealth adviser at RegentAtlantic, a fee-only RIA in Morristown, New Jersey.

He completed the program early last year.

Ali Flynn Phillips, a partner and senior vice president at Obermeyer Wood Investment Counsel in Denver, says that the program has improved her leadership skills.

“I’ve been able to take on more management responsibilities, thereby freeing up our founders’ time and providing them leverage so they can focus on long-term strategic initiatives,” she says.

Meanwhile, CEG Worldwide has a specific consulting program focused on succession planning.

“With the average age of the managing partners of advisory firms with assets over $50 million in their early 60s, they’re beginning to see that they are not immortal and need to look [at] how best to take care of their clients and realize the value of what they have created by looking externally and internally,” says John Bowen, founder and chief executive of CEG worldwide in San Martin, California.

This is part of a 30-30 series on smarter succession planning.

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