Multiple Successors
Mark Davis
PLANADVISER: When did you begin to think about succession planning and the longer-term future of your clients?
Mark Davis: I started about two or three years ago, before COVID, and COVID cemented it and accelerated it. I’m 62 years old, and my father passed away at age 66—that gives you a perspective on things. My bride is a cancer survivor, and we found ourselves in a situation where financially we didn’t need to work anymore.
We had the opportunity to start planning a couple of years ahead. When Debbie Basch, the person who helped me run the business, scheduled her retirement this past year, that became what was the final straw for me. Instead of rebuilding to replace her, it made more sense to step aside at that time.
PA: How has your succession evolved?
Davis: One of the blessings of being part of the CAPTRUST team is that, with the help of Rick Shoff, I had the chance to look down, at 30,000 feet, and handpick advisers to take on clients.
I’m thankful that my practice, over time, evolved into a national one. I had clients from New York to Honolulu and in a bunch of states in between—43 in all. It didn’t make sense for any one advisory firm to pick up what was an inefficient way of doing business.
With the luxury of having so many talented advisers on the CAPTRUST team, I was able to sort out the best person to take over plan A, plan B, etc. This was sometimes based on experience, sometimes based on geographic proximity, other times, on personality types. It’s been a pretty easy process. Seven different advisers have taken over the majority of client relationships, and I currently manage four of them. They are clients that came to us during the pandemic. I didn’t feel it was appropriate for me to back away when they had just hired us. Those final four will transition in the next six to 12 months.
PA: How did you communicate your succession planning to clients?
Davis: We laid out a thorough process. About two years ago, we made out a schedule where I called each of my clients on my own and set out what would be happening, and set up an appointment for them to meet their new adviser over the phone. Then the new adviser sat in on a round of quarterly meetings but didn’t say anything—was just there. Then the next round of quarterly meetings, that individual participated a little bit, but it was still my meeting to run. The next quarterly meeting, the adviser ran the meeting. I was the one who was just there. Now we’re at the point where the new advisers are off and running. With very few exceptions, those plans are running perfectly well with the new adviser, and there’s no need for me.
From when we communicated to the client to the time I backed away was about 18 months. It’s been very efficient. And we haven’t lost any clients.
By the end of this year, I’ll transition my whole book of business to succession advisers on the team. I hope to be fully retired by 2023. We really took this time to plan the work and work the plan. We’re following it, and it is working extremely well.
PA: Was a reason for your move to CAPTRUST to start your succession planning?
Davis: At the time, it was quite the opposite. Thirteen years ago, I wanted to grow my business significantly. I had been through personal life events, and I had been very involved and put a lot of time and energy into NAPA [National Association of Plan Advisors] and ASPPA [American Society for Pension Professionals and Actuaries]. We found ourselves in the early 2000s with a business I hadn’t devoted enough time to. I turned my focus to it, so when I joined a bigger firm, that gave me the opportunity to blast off to grow the business. I really wasn’t thinking about an exit strategy at all for my first 10 years. Only after that, in the past couple of years, it became clear that it was time to step away. —Judy Faust Hartnett
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