Succession planning is the arrangement for what happens to an advisory firm and its clients when the principal retires, becomes unable to work, or dies — covering both the planned transition and the sudden one.
Succession is the intended transition, executed over years. Continuity is what happens if the principal is unavailable tomorrow.
Most firms think about the first and postpone the second, which is the wrong way round. Continuity is the one with no warning.
Clients depend on the arrangement continuing. A firm with no continuity plan has left them exposed to an event that has nothing to do with markets, and regulators increasingly treat business continuity as an expected element of a compliance programme rather than optional.
Internal succession preserves continuity for clients and generally takes longer and pays less. External sale usually pays more and introduces integration risk for the client relationships.
Neither is correct in general. The choice depends on whether internal talent exists and on what the principal actually wants.
Internal succession requires the successor to be capable, funded, and known to clients. All three take years, and none can be compressed at the point they are needed.
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