Page 30 - 2Q 2018 June Reporter
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Bank Succession
Planning
R. David Patrick
Fritz, Jr. Marget
®
by R. David Fritz, Jr., CLU and
®
Patrick Marget, J.D., CPA, CFP , CLU ®
As the Senior Leadership teams in the with that plan. When a plan is not formally
banking industry approach retirement, creating communicated, it becomes a mental note in the
and developing the bank’s succession plan is middle of the night that does not get the attention
critical. Along with creating a succession plan, it is it needs. Once written down the plan can be
important for key executives to plan for retirement. in place for years going forward and can help
When retirement planning is ignored and not determine how to develop specific individuals, and
clearly communicated, even the most thorough what parts may be missing.
succession plans will fall apart. The ultimate goal Once the bank has determined who will be
is to have a smooth and successful transition. in the pipeline for leadership roles, it important to
Business leaders must consider their own determine a retention strategy. Most companies
retirement planning first and then integrate it into have found that promoting from within outperform
the bank’s succession plan. The leaders must those that recruit from the outside. Banks
know their future so proper steps can be taken these days have Baby Boomers, Gen Xers, and
forward with short-term and long-term succession Millennials all in the same bank, and they all
planning for the bank. The bank needs to consider have different ideas of what is important from a
who they need to retain, and how to reward them compensation and retention standpoint. What
to ensure they will remain at the bank for the years worked for one group, may not work for the next
to come, to fill leadership roles as individuals generation, be sure to take the time and listen to
retire. the employee’s desires.
The purpose of long-term succession planning The areas of retirement and succession
is to create an ideal plan for the future that takes planning is often overlooked. Too many banks are
into account all the things that are important to forced to sell because of the lack of preparation.
the bank, such as culture, philosophy, and goals. When preparing for the bank’s future focus on the
Short-term succession planning refers to being end result. Take action to develop a plan sooner
prepared for when the unexpected happens. The rather than later and communicate that plan with
bank must have a solution for when immediate other leaders and the board.
actions need to be dealt with, this is often called
the “lifeboat drill.” It is never too early to develop
R. David Fritz, Jr., CLU® | Managing Partner
your employees with depth, skills and training so
David is the Co-Founder of Executive Benefits
individuals are prepared.
Network and a 32-year veteran of the financial
A succession plan that is developed should
services industry. David began his career in the
be formalized and written down. When a plan is
insurance industry in 1986. David specializes his
in writing and is presented to the Board during
career in the design, funding and securing and
the year, the bank is more likely to stay on track
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June 2018 IllInoIs RepoRteR
