5 Steps to Prepare for the Founder’s Death

The death of an asset management firm’s founder can have a reverberating effect throughout the industry, especially among its clients and investors. The only thing that can stoke an investor’s apprehension as much as investment underperformance is the loss of a key portfolio manager. It creates precisely the kind of uncertainty investors hate. Even firms with sound succession plans and robust platforms for maintaining their success must be able to quickly convince their clients and investors, as well as the news media, that all is well.

As a result of some high-profile exits by portfolio managers over the last few years, many asset management firms have stepped up their succession plans to mitigate the risk of key-person departures. Some firms have taken steps to spread their “star power” around to other members of their portfolio management teams in an attempt to minimize the impact of the loss of a key person. But when the founder dies, everything could come into question.

That underscores the importance of having a crisis communications plan in place to ensure your firm displays the right balance of compassion, composure, and confidence to your stakeholders and the public. As uncomfortable as it may seem, now is the time to plan for such an event – while everyone is thinking rationally, and there is time to consider all contingencies.

Know Your Stakeholders

For most firms, there are three critical audiences that need to be addressed with communications tailored to their relationship with the firms: the firm’s clients and key stakeholders, including fund platforms, institutional clients and their consultants, financial advisors, and investors with significant positions in the fund’s shares; fund shareholders – the hundreds or thousands of investors who own shares, perhaps in part due to the founder’s brand name; and the investing public via the news media.

Develop Your Story

Create the story that will be told through your communications. For the sake of consistency, everyone should be on the same page using the same story lines developed around the founder’s professional and personal lives, including the following:


  • Education
  • Career path
  • Starting and growing his business/serving his clients
  • Firm continuity


  • Childhood and family
  • Affiliation such as fraternities, religion clubs
  • Philanthropic and community involvement
  • Hobbies and activities outside of work

This information will be used in various ways in client letters, emails, and press releases, which, ideally, should be prepared in advance.

Contact Clients and Key Stakeholders

Your communications plan should include a contact list of key clients and stakeholders with a preferred method of contact for each. Some will warrant direct contact by phone, while a personalized email may suffice for others. Some may have a relationship with the founder and may want to express their condolences personally to the family. You should then send a follow-up email to all explaining in detail the steps the firm is taking in the transition.

Reassure Shareholders

Average investors are prone to knee-jerk reactions over events they fear could impact their investments. Their first call is likely to be to their financial advisor, and those without a financial advisor will turn to the internet and social media to see how other investors are reacting. You should be prepared with a message to go out within a day or two following the death of the founder. Communication in the form of frequently asked questions is always received well.

Control the News Media

It’s a big deal to the media when the founder of an asset management firm dies. To control the story and limit any negative media exposure, your firm needs to have a media strategy already prepared along with the capability to handle media requests. You should also have a contact list of journalists, including key national, trade and local reporters with whom you have a relationship.

Your communications kit should include a press release that goes out immediately. Your press release should tell a story about the founder’s life, including his career path and aspirations, the firm’s founding and the principles upon which it was founded, the firm’s success and its continuity, and the founder’s family and affiliations.

No one likes to think about their own mortality, but a legacy may be at stake. More firms are being proactive in reducing key-person risk by establishing succession plans and restructuring their platforms and systems. The last step should be to create a crisis communication plan with a top-down effort signed off by the founder.

Dan Sondhelm is CEO of Sondhelm Partners, a firm that helps asset managers, mutual funds, ETFs, wealth managers and fintech companies grow through marketing, public relations and sales programs. Click to read Dan’s latest Insight articles and to schedule a complimentary consultation.