The registered investment adviser (RIA) industry sits at a pivotal crossroads. As first-generation (G1) firm owners near retirement, many lack the clear succession plans necessary to retain and empower their next-generation (G2) successors, as reported by Wealth Management.

A recent survey commissioned by Kestra Financial and Bluespring Wealth Partners reveals a troubling trend: fewer than half of G1 advisers have transferred equity, and only 6 percent of those planning to retire within 10 years have a fully documented succession plan. For nearly one-third of firms, the hurdle is financial—G2 advisers simply cannot afford the buy-in.

Often, though, the challenge is cultural. Wealth Management reports that many founders still find themselves hesitating. A 2023 DeVoe & Company white paper found 34 percent of sellers fear losing control, followed by concerns about selling to the wrong buyer, changes in client service, and limited staff opportunities.

For private equity-backed aggregators, retaining G2 talent post-acquisition is a strategic priority and a potential pitfall. Jim Dilworth of Echelon Partners notes that younger advisers often get swept up in acquisitions without clarity on their future.

Firms like Mariner Wealth Advisors aim to buck the trend. "The next generation is the lifeblood of our industry," said Kevin Corbett, Mariner's head of corporate development. Every deal Mariner evaluates factors in the quality and potential of incoming G2 talent. The goal: keep advisors engaged, empowered, and part of the firm's long-term future.

Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.