There are financial advisors who spend their careers building a thriving practice. Yet as retirement nears, they let their business dwindle to a few handfuls of clients. When that happens, the business loses its value and most of the clients lose their advisor. That makes no sense to 36-year MDRT member Richard J. Bjorklund, AIF.
“Many advisors do what I call a bell curve,” said Bjorklund, of Minnetonka, Minnesota. They reach a peak number of clients in their career, and then “they ride the business into the ground,” he said. That’s not for him. Bjorklund created other plans for his clients and his practice because he saw firsthand what it looks like when a business fades away.
Richard Bjorklund
He recalls 30 years ago when a local icon in the insurance business agreed to transition his clients to Bjorklund. In the end, it didn’t happen. Despite a written agreement, the advisor wasn’t willing to go through with the plans. Initially, Bjorklund said, that advisor “had 1,000 really vibrant, good clients with the next generation coming up. Over the period of 20 years, as he neared retirement, however, he ended up with 15 clients.”
Bjorklund knew when he needed to, he’d transition his clients to another advisor. So 12 years ago, as his daughter was finishing college, he asked her if she would be interested in trying out the business. She was, and the two now work together.
Passing on a business
Erika Wood
“My dad brought it up so that I could try out the family business, and there was absolutely no pressure,” said eight-year MDRT member Erika Wood, AIF, of Minnetonka. “I never once felt like it was something I had to do. Hearing about how rewarding the business is, though, it was kind of a no-brainer to at least try it. Initially, I was working closely with a different advisor in our office, and it didn’t end up being a good fit. Then I started working more closely with my dad. We just complement each other so much that it was just a really easy partnership to go into.”
The key to this, Bjorklund said, is putting your ego aside and giving up some control. So she could understand the business, for a year he brought his daughter into all his appointments, and she worked behind the scenes with clients. After a year, Wood started meeting with clients on her own. Her training period officially lasted two years.
“As Erika got more involved with all my clients, I would call them our clients,” Bjorklund said. “Now a lot of our clients are calling her. It’s a thing of beauty.”
For more on succession planning and working with family
- Read “Building a firm for sale”
- Watch “Work with family and flourish“
- Read “What successors need to know“
- Watch “Exit is not a four-letter word” (Top of the Table members only)
- Read “Taking over a family business isn’t always easy“
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