The sale of a business can be the single largest financial transaction of many clients’ lives. Proper planning around this event can dramatically enhance a client’s future financial opportunities. But a large part of exit planning isn’t about the client’s money, but rather, their mind. Selling a business can have important psychological effects on clients afterwards. Business owners are used to having a large degree of control over income and assets, explains Michelle Black, wealth advisory senior manager at Capital Group Private Client Services. After the sale of a company, the level of control changes and it’s your job as the advisor to help clients manage the transition, she explains.

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A recent study suggested that more than 50% of business owners intend to transition the ownership of their businesses during the next 10 years. So there’s an enormous opportunity to build a practice around business owners.

But one of the things that people sometimes don’t appreciate is the psychological side of selling a business, and it’s where you, as an advisor, can add a lot of value. As a business owner you’ve spent your entire career building a successful business and selling it changes your life completely. As an advisor, you can help them pre-experience what their new life might look like financially so they can understand what that means.

It’s also important to help them get comfortable with the amount of control that they’ll have, or maybe lack, on their assets. These are people who are used to calling the shots and taking home a regular paycheck. Now, they’re adjusting to getting a check from their investment portfolio and that comes with volatility. Just knowing that you’re their financial quarterback, their family CFO, if you will, will help.

Finally, I do think it’s critical to get business owners to understand what the next phase of their life could look like and what it’s going to cost to get there. Too often, business owners are reluctant to sell their business, because they’re holding out for the price they think it’s worth, only for them to realize that they could've gotten what they actually needed a little too late. By helping business owners plan early and planning often, you can help them avoid falling into this trap.