By Jon Crow, Regional Managing Director
56.
That is the average age of financial advisors in the United States.1 With a significant number of advisors expected to retire in the coming years, and not enough younger advisors to replace them, this demographic reality represents a “perfect storm” for advisors, their firms, and their clients if they are not prepared.
Continuity is everything when it comes to sustaining generational wealth. Without a robust and transparent financial advisor succession plan in place, advisors potentially leave the families they serve exposed and “in a lurch” if something were to unexpectedly happen to them. Even a planned retirement can be very disruptive without a clear succession plan in place.
So, does your financial advisor have a succession plan? If so, do you know what it is? You should. Below are 10 questions you should ask your advisor:
- Do you have a formal succession plan in place? Are there legal arrangements related to the plan? Will you share the details with me?
- What contingency plans do you have in place in the event a succession needs to be implemented quickly?
- If you move on from being my advisor, will you remain involved for a period of time during and after the transition?
- How often do you review and update your succession plan?
- Do you / your firm have a training program for younger advisors? What does that entail?
- How do you and your firm keep and retain talented younger financial advisors?
- Who is your successor and what are that person’s qualifications? How was that person chosen? Can I meet him / her?
- Specifically, what would a transition plan look like for me to ensure continuity of services provided?
- What safeguards are in place to protect my financial data and assets during a transition?
- Would there be any changes to services provided or fee structure in the event of a transition to a new advisor?
Along with asking the questions above, periodically assess if your current financial and planning needs still align with your financial advisor’s capabilities and overall service model. For example, if you are a family with multi-generational wealth, ensure that your advisor’s current model and structure aligns with your long-term goals and provides the resources and know-how to achieve your objectives, now and in the future.
1 The Financial Advisor Industry Has a Headcount Problem
