Financial advisors have an entrepreneurial spirit: They are independent, ambitious and determined. Often, that ambition extends not only to their professions, but also to how they want to live their personal lives. For those who harbour dreams of retiring comfortably, financial services training can help them plan for retirement at any stage of their career.
A recent study by The American College found that many small business owners are worried about their retirements, yet a large number have yet to take action and start planning how they will provide for themselves after leaving the labor force. Researchers found that 40 percent of all small business owners, regardless of gender, have concerns about how the cost of living will increase, how much they will need to care for their health (42 percent female, 38 percent male), and whether they will be able to maintain their standard of living (37 percent female, 35 percent male).
"When you consider that the mean age of our respondents is just over 50 you have to wonder, 'What are these individuals waiting for?'" stated Mary Quist-Newins, the director of the State Farm Center for Women and Financial Services at The American College. "Retirement will be upon them before they know it." Small business owners need to prepare for their retirement or exit now.
Part of the reason for the delay could be traced back to entrepreneurs' oversimplification of retirement. Surprisingly, a little more than one-third of those who responded to the study said they think their retirement planning needs are complex. Often, entrepreneurs are so focused on their business that they have given little thought to the next phase in their lives. Entrepreneurs need to consider the totality of their lives - work, family, health, relationships and their own continuing growth and development - and decide what will happen to the business when they retire or exit.
As you build your business, the structure it takes will dictate how it will be run in the future. Are you creating a legacy, an enterprise that will continue serving clients long after you've stepped out of the industry? Or are you creating relationships with clients that will last for the time you wish to work, and then refer them to other advisors when you're ready to leave the sector?
These decisions will play into how you expand your firm, groom employees, interact with clients and define the role you will take in the business (if any) after retirement. I'll discuss dynasty building in the next instalment.