All too often, I see principals of advisory firms convince themselves that they have a succession plan in place when, in fact—more often than not—what they have is more of a vague idea of what they hope will happen.
We all know, however, that things don't always go according to plan. Successions are complex undertakings. They can be exceedingly uncomfortable. But the cold, hard facts are that none of us will be running our businesses forever, and we need to plan for that inevitability.
Read MoreNo succession plan? Kiss clients good-bye
Investors should ask themselves this one simple question: Do you believe that if you went to sleep tonight and didn't wake up, the firm you have a relationship with today should be entrusted with the ongoing management of your family's wealth?
If your answer is "yes," congratulations; this is a good litmus test for the value you receive today and the value your family would continue to receive in the future.
Now, another question for investors: If your advisor went to sleep tonight and didn't wake up, would you continue to entrust the firm he/she left behind with the ongoing management of your family's wealth?