A report by Cerulli Associates revealed that there are 100,000 financial advisors controlling $10 trillion in client assets who are on the path to retiring in the next ten years.
Currently, 45% of advisors surveyed aim to transition their business internally to an employee or family member. Another 30% hope to sell their business externally. This leaves 25% of survey participants with not even a concept of a succession plan.
Matt Matrisian, the chief channel officer at AssetMark, told Investment News that a good succession plan takes ten or more years to prepare and execute. Martisian suggests that advisors prepare for multiple scenarios if they want options beyond selling their business to the highest bidder.
Additionally, Jeff Nash, co-founder and chief executive of Bridgemark Strategies, said a significant hurdle with traditional internal succession planning is the shrinking number of young advisors entering the industry. Nash shared that advisors should look beyond internal ownership transition and external sales and consider the nuances involved. For example, external sales can be partnered with internal succession, and advisors can arrange partial and full transitions. In either arrangement, advisors need a long runway to prepare for their succession.
Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.
