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Hosted by Financial Advisor Coach, Ray Sclafani, "Building The Billion Dollar Business" is the ultimate podcast for financial advisors seeking to elevate their practice. Each episode features deep dives into actionable advice and exclusive interviews with top professionals in the financial services industry. Tune in to unlock your potential and build a successful, enduring financial advisory practice.
Ray Sclafani (00:00.366)
Welcome to Building the Billion Dollar Business, the podcast where we dive deep into the strategies, insights, and stories behind the world's most successful financial advisors and introduce content and actionable ideas to fuel your growth. Together, we'll unlock the methods, tactics, and mindset shifts that set the top 1 % apart from the rest. I'm Ray Sclafani, and I'll be your host.
What if the true value of your business isn't measured by revenue, assets, or client retention, but is also measured by how well you're preparing the people who will one day take your seat? At ClientWise, we believe the most successful leaders aren't just building great firms, they're building great future leaders. Today, I want to dive into a challenge that's quietly becoming a crisis in our profession, and that is the lack of succession planning.
We'll unpack what it really takes to spot, shape and support the next generation of owners. Those who not only serve clients, but will one day steward your legacy. Because at the end of the day, succession isn't an exit strategy. It's a leadership responsibility. So let's explore how you can start fulfilling that now. Succession planning isn't a someday task. It's a now decision. And it's about more than your eventual exit. It's about your commitment to clients, your team and your mission.
As fiduciaries, we all have a responsibility to ensure continuity of care. Clients aren't just investing their assets with your firm, they're investing their trust. And that trust should extend far beyond you. The research is clear. Many advisory firms lack a formal, actionable succession plan. And not only does that threaten firm value, it creates uncertainty for clients, team members, and potential buyers or successors. Without a clear path for who's next.
Everything you might have built is pretty vulnerable. So where do you begin? Succession planning begins with identifying and developing the right people. It's tempting to assume your best advisor is your future partner, but ownership requires a different mindset. It's not just about being great with clients. It's about thinking like an owner, being invested in the firm's success, culture, and long-term strategy. It's about followership. Do the team members want to follow those that you're thinking as the next gen up?
Ray Sclafani (02:28.47)
At ClientWise, we work with leaders across the industry to develop these future-ready, talented professionals. And we've identified eight essential qualities that you'll want to nurture if you're serious about building the next generation of owners and partners. So let's walk through each of those. First, there's a sense of financial acumen. They need the technical strength to advise at a very high level, those clients now and the clients of the firm of the future.
And they want to have the drive to keep growing that expertise as the evolution of services for clients continues to evolve and more and more teams look like many family wealth offices. You're going to see a pop-up of services. And in fact, I bet your firms probably providing more than just investment management and financial planning, which are table stakes today, estate planning, tax, trust, risk.
family governance, wealth transfer, all of these require a sense of financial acumen and technical competency that's really key. So that's number one. Number two is this opportunity to develop business. Are they able to bring in new relationships to the firm? First and foremost, are they able to generate referrals from existing clients? Are they able to identify opportunities to serve existing clients and expand wallet share?
and are the next generation building their own niche, their own sense of identified potential client in the marketplace and know how to bring and win that business to the firm. If your firm's done an effective job of institutionalizing leads, are your next generation leaders effective at closing and winning that business as those leads come to the firm? That's number two. Number three, leadership skills. Can they inspire? Can they lead?
Can they retain a team of high performing professionals? Are you investing in their leadership development? We find that as a highlight for most firms as they're pouring into and investing in their next generation leaders. four, strategic thinking and agility. You want someone who can think three years ahead, who can adapt quickly when the market or the firm shifts. You want those that can be around the table and do the work.
Ray Sclafani (04:50.018)
to think about the unintended consequences, the intention, the strategy. Number five, project management skills. Sounds really simple, but execution matters. Can they turn ideas into action, manage systems, and deliver results for shareholders? Number six, collaboration. Not just working with others, but co-creating success in an ensemble environment. It will take far more
next generation leaders to replace one controlling owner founder. In fact, I've heard it's as many as three to four, and it takes upwards of seven to 10 years in some cases to develop that next generation leader. So when you think about collaboration, it's about bifurcating the role of the current owners and dividing that into a collaborative structure that's interdependent, where multiple members have performative opportunities
to take on the project management, to collaborate with one another. And here's number seven, share leadership. A true willingness to share power, grow together, grow others, and help the whole firm win, not just themselves. And number eight, this may sound a little bit silly, but I don't mean it to be. It's a deep responsibility. They show up like the success of the firm is on their shoulders because they believe it is.
You know those late nights where you wake up at two o'clock in the morning and you're right down an idea or two. It's that thing that keeps you up that client, that team member. it's that entrepreneur mindset where you're always thinking about the deep responsibility that you have to others, team members and clients. that would be a number eight. The question isn't, do you have the potential leaders in your team? In fact, I'm willing to bet if you're listening to the building, the billion dollar business podcast, you really do. The real question is.
Are you giving them the clarity, the challenge and the coaching they need to grow into that role? Leadership development doesn't happen by accident. It happens when you model ownership thinking. I'm to pause there. It's really important. Model ownership thinking. Are you providing those others in your firm, the visibility into firm strategy and decision-making? Are you offering real responsibility and opportunities to lead and learn?
Ray Sclafani (07:13.044)
even when it's messy. That's what I mean when I say performative opportunities. And are you providing consistent coaching and feedback along the way? Think about the top performers on your team today. Who can step up into a greater role if given the chance? And equally important, who could you hire today with that mindset in mind? So here's the next challenge. Identify one team member with partnership potential. Maybe somebody you've already identified and you're pouring into, maybe someone you haven't just yet.
Sit down with them, share what you see, ask them about their long-term goals, and co-create a development path that includes mentorship, stretch assignments, and involvement in key firm initiatives. Start now because the sooner you invest in your future leaders, the more confident your firm and your clients will be in the years to come. Before we wrap, I'd like to provide a few coaching questions for your consideration. First, what conversations do you need to start
now to ensure your firm's future leaders are prepared and inspired to take ownership one day. Number two, if one team member were to step into your role five years from today, what experiences, competencies, skill sets, and coaching would they need between now and then to be truly ready? And how might you evolve your leadership approach to spend more time developing the people who will shape
your firm's future success. Thanks for joining me on this episode of Building the Billion Dollar Business. If you found this helpful, I'd welcome your feedback. And until next time, keep leading forward. Your legacy is not just what you leave behind. It's who you lift up along the way. Well, thanks for tuning in. And that's a wrap. Until next time, this is Ray Sclafani. Keep building, growing, and striving for greatness. Together, we'll redefine what's possible in the world of wealth management.
be sure to check back for our latest episode and article.