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Change of focus: Advisers need to plan their own retirements, too

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Advisers spend a great deal of time helping clients transition to retirement, but how should they deal with the end of their own careers?

There are many approaches, but two common themes resonate among older advisers.

First, advisers should have a plan for how their retirement will play out. And second, they should have the flexibility to change the plan if circumstances call for it.

Carl Smith, 65, is president of The Smith Group in Aiken, S.C.

After a health scare seven years ago, he bought a recreational vehicle and began to cut back his hours. He has a succession plan firmly in place at his firm and is down to one or two days a week there.

But instead of tooling around the country in his RV, Smith has co-founded another advisory firm called Clarity to Prosperity in Westlake, Ohio.

“I figured out I’m an entrepreneur who happens to be a good financial adviser,” he says.

Now Smith plans to work 30 hours a week probably for another five years.

He is grooming a 29-year-old adviser to take over The Smith Group.

“When I hit 70, I’ll slow down to one or two days a week,” Smith says. “Then I’ll hit the RV.”

The preparation for his successor amounts to “an intensive educational process,” Smith says.

“It’s about making sure he understands how we treat our clients and what our legacy is. But it’s not my intention to get out completely, so I’ll be around for the next 10 years to advise him,” Smith says.

Ralph Grauso, 62, founder and president of ASC Financial Group in Allentown, Pa., also has begun his transition toward retirement, taking the summer off in Ocean City, Md., and vacationing in Hutchison Island, Fla., during January and February.

He hopes to hand the firm over to his 34-year-old son during the next five years.

“I’m in the process of getting a valuation of the business,” Grauso says. “And then I’ll work out a way to gift him part of the business and set up a buyout of the rest.”

Grauso thinks that it is a bad idea on principle to give his son the whole business for free, and he also needs to use proceeds of the sale to fund part of his retirement.

“My son is fine with that, too,” Grauso says.

Once he turns 70, Grauso plans to retire. He views it as paramount to make sure that both existing and new clients are aware of his transition.

“We’ve made sure to explain to them what the succession plan is,” he says.

“So far the response has been positive. We stress that we’re a family business, and people seem to like that,” Grauso says.

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