THE SPOUSE
Not very many people know this, but the summer before I turned 16, I was paralyzed for about four hours after an accident I had while playing baseball. That wasn't the moment that changed my life. That moment happened three months later. Three months later, I was sitting in a wooden pew, choking on the incense of the smoke filled cathedral, sitting in Mass at the private boarding school I had enrolled in just prior to the accident.
I sat there, wondering, imagining, what it would have been like if the paralysis hadn't been temporary. I attended this school to play baseball. Would I still have been allowed to attend? Would I have been rolled into the church? Would I have gotten a hot nurse (remember I was only 16!).
I never had to answer those questions, but I wondered and played the consequences out in my mind, like a chess player thinking 5 moves ahead, what would have been...
We all have gotten lost in life, and it's good to live in the moment, it's good to live for today, but we MUST also plan for tomorrow. Have you considered what happens, to your practice, to your clients, your family and your staff when you die without a succession plan?
I've spoken to advisors across the country, and I've asked, "if you die tomorrow, who do you have to sign checks?" Remember bills have to be paid. Most look at me as though I've asked them to recite their social media marketing plan (hint: you probably don't have one but you should get one). After an awkward pause, with a boyish like enthusiasm, some have said, "well I've got my spouse, she can sign the checks." * I understand women are also advisors, however this question has been mainly asked to males given their disproportionate slice of the advisor gender pie.
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First, upon further questioning, many assume a spouse can just sign the checks because they're the spouse, but in fact, this is incorrect.
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Second, although some advisors do have their spouse listed as an authorized signor, most states do NOT allow a non-licensed spouse to operate the business. An advisory firm needs a CCO and a licensed advisor to operate. Without both, the firm cannot collect advisory fees. Therefore how long can the spouse write checks without no new revenues.
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Third, the advisory practice is most vulnerable during the first stage proceeding an adivsor's sudden death or illness. Clients want to be assured there is someone watching their accounts, their plan, the plan you, the advisor, put in place. While the spouse, possibly could fulfill this role, would you want them to? Wouldn't it be better to allow them to mourn, grieve, or be by your side?
Without a CCO and an authorized signor, many firms staff, which are often family or as close to family as you can be without actually being family, will go unpaid and the value of the firm will quickly erode. This hurts the people you love and the people who depend on YOU!
Oeconomus will ensure your staff can be paid, your clients can be served, and the value of your business will be preserved for your family. We become YOUR steward.