Producer Succession Planning - Recruiting and Training the Next Generation of Professionals

Recruiting a Successor

As I speak to producers, the role of a junior associate has become more critical in producer succession planning conversations. How does one go about recruiting a successor?

The process behind proper producer succession planning involves years of research, development/mentorship, and eventual transition. Hence, the question shouldn't be "how" but "where" to begin to recruit your successor. Perhaps answering that question may lead you to answering the "how."

Successors may come from various sources: family, friends, clients, etc. And though leaving a business to, say, a child or family member might be the most likely option, it should not be the only one. Some companies have turned to internship programs to recruit talent for producers who may be ten or more years away from retirement.

There is a deep well of talent and long-term professional development among the generation known as the "Millennials" born between 1980 and 2000, also known as "echo boomers." Though much has been said both positively and negatively about this generation, they provide one of the more interesting and abundant recruiting opportunities, as their numbers top 80 million.

Not to be discounted are recruiting opportunities from within: through your firm or organization; through the strategic partnership that you've spent years building; and through affiliations and associations.

Development Involves Mentorship…and Patience

It is imperative that a potential successor, once brought on board, receive the support, supervision and training to acclimate him/her to the business and the producer's relationships. Often times, the lack of clear communication about goals and expectations between the two parties involved, and a lack of training, mentorship and support for the more junior associate, lead to an unsuccessful successor pairing. Companies that can provide a solution system to the latter problem will differentiate themselves in the marketplace.

Many companies already have established systems of training and professional development for inexperienced and experienced producers. Therefore, the retiring producer should not be entirely responsible for developing and mentoring his/her successor. Establishing business acumen lies not only with commitment from the junior professional but from the dedication of and support from other members and partners within the firm itself.

Transitioning for Growth – Where the Industry Needs to Go

Arriving at this juncture involves weathering a long and arduous process. Ultimately, one hopes the transition is as seamless as possible with minimal disruptions to the business and its structure, and most importantly to clients.

We can get lost in the details behind financial incentives for more senior producers to transition their businesses to a junior partner, but the complexities behind this are far more customized than finding a potential successor. Each financial services institution has its own way of dealing with financial and business arrangements; that's the easier part of the transition should it come to this stage.

This issue is not about what to do at this juncture but what needs to be done to get seniors producers more smoothly to this point. Companies that can offer a centralized system of support for producer succession planning will find themselves at a great recruiting and retention advantage. A smooth transition will also relieve its clients who, despite popular opinion, still strongly prefer and respond to the face-to-face sale. Therefore, we do have much to do to continue to benefit from those loyal relationships.