Succession and continuity planning are critical topics within the life insurance industry. It’s no secret that the industry overall is aging — there are over 8,600 financial professionals turning age 68 every year* — a pace that promises to continue for the next 13 years.
But what happens to the business you’ve built if you don’t have a succession plan in place? Ultimately, another financial professional will work with your clients.
Wouldn’t you rather have a role in deciding which financial professional that will be?
Protect your business
If you think about what you do with your clients every day, your career is focused on helping business owners protect their businesses. Yet many financial professionals don’t do the same planning for protecting their own business.
Succession planning is not an easy process. It can be time consuming, it can be emotional, and, done right, it gets under the hood of your personal and professional life.
Penn Mutual has taken major strides in making succession planning an easier process for you. Many financial professionals have engaged their own personal attorneys and drafted legal documents that outline specifically what they want to happen to their businesses if they retire or pass away. We quickly learned that this document couldn’t be drafted overnight or even in several months. But what if something happens to them unexpectedly, while they were working on finalizing their formal plan? In May 2019, we launched a simplified Business Continuity Agreement, which has quickly become a game changer for financial professionals, because it provides immediate protection of their business in the event of their death or total disability.
Developed with financial professionals, for financial professionals
Penn Mutual’s Field Development team has developed a Business Continuity Agreement in partnership with an advisory committee composed of career and independent financial professionals and field managers.
During discussions with the committee, we uncovered a need for a temporary agreement — one that describes what happens if a financial professional unexpectedly leaves the business. Without such an agreement, the business is distributed back to the local field leader, who decides how that book of business will be serviced in the future.
Instead, a two-page Business Continuity Agreement allows financial professionals to choose the servicing/commissionable financial professional on their entire book of business, in the event of their death or disability. It also provides peace of mind as they build their business and take the next steps in developing a formal succession plan.
Take control of the future
Our Practice Development team has been hard at work — hosting Transition Planning webinars and in person trainings — to help you understand the value of your business and the steps you can take to protect it. Since launching this program, we have well helped over 50 financial professionals develop and execute these agreements, and we look forward to seeing all financial professionals having a signed continuity agreement in place. Too often, these plans are not thought of until it is too late.
To take the first step, schedule a continuity consultation by emailing our team firstname.lastname@example.org.
*FA Magazine, Advisor Headcount Forecast to Drop Through 2016, Jeff Schlegel, June 6, 2013. Retrieved from https://www.fa-mag.com/news/advisor-headcount-forecast-to-drop-through-2016-14438.html
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