This is a highly effective coaching program unlike any other in the industry. It is designed for FAs within 1-3 years of retirement who are looking to maximize the payout on their book when they retire. It’s also for the successor FA or team who want to retain the assets and maximize the retirement opportunity.
Recent studies show:
- Over one third of financial advisors plan to leave the business within the next 10 years
- More than $2.3 trillion in assets are managed by financial advisors who are 60 or older
- Less than 25% of these advisors have any sort of succession plan
- Among advisors who do have a succession plan, only 39% cover their team’s transition as part of the plan.
Most advisor teams are siloed for the most part when it comes to client coverage. This is a relationship business. Clients must feel comfortable with the successor advisor if the remaining team hopes to retain the assets, and the retiring advisor wants to maximize the payout on their book. This makes a client/team transition plan a critical component of succession planning.
Wirehouses and RIAs often handle succession planning differently. In most wirehouses, the retiring advisor must partner with another advisor in the complex. Upon retiring, they are paid out a percentage of revenue from their book over a five to six-year period. At a wirehouse, the retiring advisor’s income from their book depends on the remaining team’s ability to retain clients and grow assets.
Occasionally a retiring RIA will agree to seller-finance the sale of their business over a period of several years. However, it’s more typical for the successor advisor to obtain financing to buy the book and put half down with half paid over time.
Regardless of whether you’re a retiring advisor at a wirehouse or a RIA looking to sell your business, a smooth transition to the successor advisor is essential to a solid succession plan. It communicates integrity to your clients and helps you leave behind a legacy of compassion and professionalism.
Because no one really likes change, a successful transition plan should be implemented in “6 distinct phases” over a two to three-year period prior to the retirement date. The transition should occur so gradually, that clients barely notice. By following the Retiring FA Transition Coaching System, both the client and the successor advisor have time to grow comfortable with each other before the retirement date.
 “Succession Planning for Financial Advisors,” Cuna Mutual Group, Accessed April 1, 2019, https://www.cunamutual.com/resource-library/insights/operations/succession-planning-for-financial-advisors.
 “Why Advisors are Failing to Plan for the Inevitable,” Janus Henderson Investors, Accessed April 1, 2019, https://en-us.janushenderson.com/advisor/succession/.