First, a bit of depressing news: Analysts estimate that up to 95% of children will fire their parents' financial advisor.

And for advisors serving business owners, that represents a massive missed opportunity, since $13.2 trillion in business owner wealth will transfer in the next decade.

Not all of it will go to the business owners' children—but a large majority will, considering family-owned businesses make up the greatest portion of North America's wealth—90% of all business enterprises in North America are family firms.

Financial advisors serving clients who don't own businesses face enough of a challenge when it comes to retaining their clients' heirs. 

But advisors serving business owners are dealing with far more complex relationships, and will need to do more than offer a slick mobile app or start building rapport with children early—typical advice for serving the next generation of wealth. 

To be clear, as an advisor working with a family-owned business, you should be doing those things. They just won’t be enough to solidify your future with the business.

Understand the Business Deeply Now

Your best chance for being an indispensable asset to the business’s future owners is by becoming an irreplaceable trusted advisor now. That means providing value that your current clients can’t get, or don’t want to get, anywhere else. 

  • How does the business rank compared to others in the same industry?
  • Are they falling short on key benchmarks?
  • Where can they optimize performance?

Help them understand where there are areas for improvement, and where their greatest opportunities might be. The closer you are to the business and its financial nuances, the better equipped you’ll be to identify future challenges and help the family map out solutions.

Get the Succession Planning Conversation Started Early

For a number of reasons, business owners tend to avoid succession planning. It’s emotional, it’s complicated, and - especially for family businesses - it has the potential to kick up suppressed internal conflicts.

For exactly those reasons, business owners should be having succession planning conversations, as soon as possible. Work with them to facilitate discussions that include all key stakeholders, including business heirs. 

The more comfortable the family becomes with succession planning, the better—especially if you’re part of the reason they feel prepared for what the future of the business looks like.

Be an Objective Third Party

It’s not always clear to business owners whether or not their children are ready to take over the business—or if they ever should. They may have professional interests entirely outside of the family business. Or they may be very willing to be involved, but lack the skills, capital, or business insights necessary to take over within their parents’ timeline.

If you understand the business and the goals of the succession plan, you can act as an impartial third party by offering guidance in these scenarios. For example, if successors are eager to take over the family business but don’t have the experience necessary to do so, help them find training programs or leadership courses that build those skills, and work to include them in conversations about the business’s financial and performance projections.

Help All Parties Make Informed Financial Decisions

Should the current owners sell their business to their child(ren), gift it, or some combination of the two? What are the retirement, tax and financial implications of each option? 

What about upcoming industry, market and economic projections the business should be aware of?

When the current owners step away from the business, is it likely to make a massive impact on the business’s value? 

This is where you shine. Serving business owners is complicated. Guiding the business ownership transition and subsequently serving their children, potentially even more so—but you have the power to show them how to make informed financial decisions that positively affect both the business and the family. 

You prove your value when you show them how to optimize theirs. Start by providing a business valuation before the current owners exit the business, so they can determine the most effective way to transfer ownership to their children.

Consistently review key performance indicators to help the new owners understand where they need to focus their efforts in their first months or years at the helm. Run “what if” scenarios to illustrate the impact of improving recurring revenue percentage or losing a key customer.

(You can do all of this in seven easy steps using BizEquity’s online business valuation software; click here to learn more)

The bottom line: Retaining the next generation of business owner clients is about more than bonding with them early on, or implementing a great mobile experience; the key is to consistently provide value for the business in general.

When the current business owners step down and their newly in charge children are facing their first challenges, you want to be the first number they call.