Having a family member take over a practice is an emotional rollercoaster

Viola Van de Ruyt started thinking about succession planning 10 years ago.

“If you’re bringing in an outsider — to find the right fit, mentor them and integrate them — the trust has to be there,” said the head of VandeRuyt Wealth Management Group, National Bank Financial in Sidney, B.C., who’s been an advisor for three decades. “I’ve heard horror stories of people having put in three years to train somebody to succeed them just for the person to go somewhere else. Then, you’re back to square one.”

Fortunately for Van de Ruyt, her niece, Rachael Jamieson, is taking over her practice. For the duo, trust goes both ways.

“I can be confident and go whole hog on the business without the fear of Viola turning around and selling it to somebody else,” Jamieson said.

“That’s why you see family successions in this industry,” Van de Ruyt added.

Keeping a book of business in the family often means giving successors time to discover their passion for financial services, drawing clear boundaries between work and home and leaning on dealer support for succession planning.

Give the kids time

Children who don’t at first seem interested in taking over their parent’s practice may become interested later.

When Michele Hendriks started thinking about who might succeed her at Hendriks Private Wealth, IG Private Wealth Management in St. Catharines, Ont., her three kids weren’t old enough yet.

“It would’ve meant my associate taking over, [but] she was too overwhelmed to take over the whole thing,” she said.

Two of her three children went on to earn business degrees, while the other became a graphic artist. When a position opened, her daughter Megan Hendriks joined the practice to help with administration and marketing.

“Out of the three of kids in my family, I was the least likely to join the family business,” Megan said.

Michele said she “calmed down a little bit” about succession planning as she trained Megan to take over.

An added bonus of giving a succeeding child time to find their own way is that they come more prepared after they’ve had other job experiences.

That way, the next generation has had other bosses and learned workplace skills before joining the family practice, Jamieson said. You run the risk of creating a mini-you if you hire a child right out of school. It’s beneficial if they acquire different skillsets and different ways of thinking to complement yours.

“This was not their first job. … They came with the right attitude,” Van de Ruyt said. “I think if I hired [Rachael] straight out of high school, I would have to say, ‘We’re not at home right now. This is a business, clients come first.’”

Draw clear boundaries

Once the next generation has joined, it’s important to draw boundaries to separate home life from work life.

Justine Zavitz joined her mother, Terry Zavitz, at Zavitz Insurance and Wealth in London, Ont., more than 20 years ago.

“I was scared, I’m sure she was too, to work together,” Terry said. “I wondered if it was going to work and how badly it would ruin the family relationship.”

While it’s hard not to bring up work at the dinner table, the Zavitzs agreed to set boundaries. For example, they link their roles to place and time — they see each other as colleagues in the office, addressing each other by first name, and go back to being family in social settings.

“If my mom wanted to talk to me about something and called me on a Sunday morning, she never pushed back if I said we’re not having this discussion right now,” Justine said.

It also helps to join groups like Family Enterprise Canada to meet other family business owners, Justine added. She bounces ideas and learns from others who have walked down the same path.

Lean on your dealer

When Zavitz was still independent in 2008, Terry and Justine had the practice valuated professionally, Terry said. In those early days, they wanted to structure the buyout themselves. They wrote their own agreement by hand, got an accountant and a lawyer to look over it, signed it and each kept a photocopy.

In 2024, MGA Hub International bought the practice, necessitating a new shareholder agreement as the practice’s value increased and circumstances changed, Terry said. “The toughest conversations we had were when we were selling to Hub because it was truly an emotional and difficult decision to make.”

But for those already part of a dealer network, advisors can lean on their dealer’s support for valuating their practice and planning their retirement transition.

As a bank-owned practice, Van de Ruyt uses her dealer’s formula to calculate the value of her book of business. It includes factors like revenue in recent years and average client age to come out with a book value range, she said. “When they give me a range, I will probably choose the lower end because I’m not here to sell to the highest bidder.”

Van de Ruyt likes that National Bank has a teaming policy to help plan the practice’s future, so if her son, currently an associate, wants to become an advisor, Jamieson can sell him equity, Van de Ruyt said.

As for the Hendriks, Michele said she switched to IG in 2024 as it offered better succession support for retiring advisors and made it easier for Megan to take over the business. Megan can buy the practice bit by bit every year without stressing about a massive loan.

And with retirement in view, Van de Ruyt empathizes with clients who don’t like letting go of their own businesses.

“I had [a prospect] come in a couple months ago with a very successful business,” she said. “Logically, he realized he should retire, but I could sense emotionally that the business was his baby. … I can understand where he was coming from.”