6 Ways to Ensure the Survival of Your Family Business

Building a Legacy

15 Feb 2017
Building a Legacy

TEN-YEAR-OLD SAMANTHA HUMPHREY knows what she wants to be when she grows up. She plans to take over the financial services firm her grandmother founded in Saint Cloud, Minn., and that her mother, Laurie, leads today.

Laurie didn’t always plan to follow in her mother’s footsteps as the owner and lead financial professional for Granite Financial. It wasn’t until she started working part-time in the practice during her college years that Laurie began to see her mother, Pat Hinds, as others in their community saw her: a successful and respected business woman.

“Working in the back office of the business helped me grow and made my relationship with my mom grow,” she said.

After graduating cum laude from Saint Cloud State University, Humphrey specialized in long-term care insurance for a company in Minneapolis for five years before returning to Granite Financial in 2006.

“My hope all along was that Laurie would follow me into the business and take over my firm someday,” Pat said. “With her raising a young family, we hadn’t fully detailed a plan for how or when that transition would happen. And then I had a major medical incident three years ago that moved our plan up about five years.”

Pat’s dedicated and experienced staff swung into action as Laurie fast-tracked into her new roles of financial professional and leader of the business.

“Our plan was to wait until my kids were a little bit older before I worked on getting my licenses,” Laurie said. “It was scary, because there was a lot of change, a lot going on with learning more of the business and trying to manage staff and studying for my licensing tests.”

The experience highlighted for mother and daughter the importance of having a continuity plan, regardless of one’s age.

“Looking at what happened with Mom, planning for unexpected illness or other emergencies is really important,” Laurie said. “Life is short, and you don’t know what is going to get thrown at you. To not have a plan puts your family, your employees and your clients in a tough situation.”

For many months, Granite Financial kept Laurie’s new role somewhat low key. She had already started sitting in on client appointments. As time passed, clients began to ask questions about the future of the business. Some clients knew about Pat’s illness. Others did not. In the summer of 2015, Pat and Laurie decided to make the transition official with a heartfelt letter from Pat to her clients.

“Words cannot adequately describe how proud I am of Laurie’s accomplishments, and how blessed I have been to have her join me in this business that I love,” Pat wrote. “She shares my beliefs, goals and passion for helping our clients. She has learned every aspect of the business, from paperwork to portfolio design, and continues to expand her knowledge. She is preparing to purchase Granite Financial from me, to continue the legacy I started two decades ago. Few parents could ask for more from their child, to have her so completely embrace this other child – my business – that I have lovingly nurtured.”

Client response to the letter showed Laurie and Pat the importance of good communication, no matter what the situation.

“We were a little nervous about putting everything out there, but all we’ve received is positive feedback,” Laurie said.  “People have called to thank us for letting them know what’s going on. Mom has received emails from people congratulating her on her retirement. So it’s been good.”

The life stage of many of Granite Financial’s clients made communication about the future of the business even more important.

“Communication about continuity and succession shouldn’t happen just because a health issue or other emergency comes up,” Laurie said. “As we are aging, our clients are also aging. They don’t like change or uncertainty, especially when they are getting ready to retire or are already retired. As we started talking about Mom’s exit plan, we heard from clients that they liked that I was already in the office and they could start getting comfortable with me. We do a lot of joint meetings, and that has helped them adapt. And it helps the clients to know that Mom is not going away entirely. I think clients like knowing that Mom and I talk, that I get their history from her.” 

Pat isn’t the only woman mentor to help Laurie in her journey. She participated in LIFT, a mentoring program offered through her broker-dealer, Securities America, in conjunction with its parent company, Ladenburg Thalmann. The program paired her with Kimberly Kropp, a 30-year industry veteran who owns Moylan Kropp Retirement Planning in Omaha, Neb.

“Working with Kim has challenged me to move outside my comfort zone and has given my confidence a boost that is outside the mother-daughter relationship,” Laurie said. “Jumping into this business in an accelerated fashion meant having many things thrown at me at once – licensing, learning to run a business with a staff and working with clients, just to name a few. Having someone give me a fresh perspective and teaching me from a different point of view provided cross-training that you can’t get from any book.”

Prior to her illness, Pat had hired another financial professional to work with her and possibly take over the business if Laurie decided not to. But having Laurie in the business and ready to take on that challenge during a crisis allowed Pat to see her vision of a second generation running Granite Financial come to fruition.

“Having Laurie there when I needed her, personally and professionally, was a huge relief,” Pat said. “The stress level was running pretty high at that point. Knowing that Laurie would take care of my clients in a similar manner as I would and being able to work together with the same goals and objectives in mind was primary. I was really proud of how Laurie was able to step into my shoes so quickly and really take as much interest in the business as I did.”

Pat continues to meet with clients but has given the day-to-day operation of the business to Laurie. Having passed all the necessary licensing exams, Laurie is now working toward the Retirement Income Certified Professional designation from The American College.

“Having my mom turn over her baby to me, this business that she’s grown, spoke volumes about her trust level in me,” Laurie said. “I am proud of her and what’s she’s built. I know the relationships she has with her clients speak to the person she is, and I just appreciate that I have the opportunity to continue that care into the future.” 

And Samantha stands in the wings, waiting to become the third generation of women to run Granite Financial – after she finishes school, of course.


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