Over the next 10 years, the accounting profession will witness the largest retirement and succession event in its history. This news is only the tip of the iceberg: What lies below are the millions of clients that small and midsized accounting firms service. If these clients aren't properly transitioned to others in the organization, these firms and their retiring partners will be at risk.

He said: If firms do not have a protocol for retiring partners regarding the transfer of their clients, trouble lies ahead. Many firms are not raising the issue at partner meetings or even discussing it one on one with soon-to-be retired partners. This is a more complex matter than most firms think. The majority of partners will never transition their clients on their own. Sometimes this is because they are simply not motivated to do so. This can be a result of the firm not requiring them to do so. Occasionally, transitioning clients to others may even negatively affect current and deferred compensation!

She said: It's up to the retiring partner (i.e., the relationship manager) to drive the process. We are in the relationship business and we know that clients do business with people they genuinely like and trust. If a successful transition to another professional is to be made, the partner better be driving it.

He said: I beg to differ. My experience has been that the majority of partners, especially those closer to retirement, are interested in retaining what they have worked for over the years. Many times, they will only do those things that protect their interest. That's why the firm needs to set the process.

She said: But the retiring partner needs to buy into the process. You can't force a client to build a relationship with another individual in the firm. Firms can set up a process for the transition - this should be the case in every firm. Firm leaders should involve the retiring partners in the planning for the transition. This planning should start three years or more prior to the departure date. Don't kid yourself and think a successful transition will happen without the buy-in of the relationship manager.

He said: I agree that the retiring partners needs to buy in, but the firm will have one process, and only one process to transition clients. It can't be different for each partner. The firm needs to make many decisions. For example:

  • When does the transition period begin?
  • How will key clients be informed?
  • Does the transition impact the partner's current compensation?
  • What is the consequence of not transitioning the clients?

She said: Regular check-in meetings should also be occurring. A plan should be in place to introduce multiple points of contact into the relationship over a period of time. If these contacts include another partner and a senior manager, for example, these individuals need to be held accountable for building a relationship with the client and for becoming familiar with the client's situation and needs. If this goal of transition is communicated and documented as a priority for more than just the transitioning partner, it is more likely to occur. If the transition is not seamless, the client is likely to be wooed away by a competitor. Remember: Your top clients are your competitor's top prospects. Protecting the relationship with clients is imperative.

They said: There is no doubt that successful client transition requires planning and the cooperation of the transitioning partner and the new points of contact. The partner and the firm must work together for the smoothest possible transition. The process must benefit the partner, not penalize them. Everyone wins -- the retiring partner, the client and the firm -- when the process is clear and followed.

 

August Aquila is a well-known consultant, retreat facilitator and author. Reach him at (952) 930-1295 or aaquilaa@aquilaadvisors.com. Angie Grissom is president of The Rainmaker Companies, which exclusively serves accounting firms. Reach her at (615) 373-9880 or angie@therainmakercompanies.com.

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