The ClientWise Blog

At ClientWise, we talk at great length about the critical importance of cultivating the NextGen owners and partners who will guide your firm into the future. It’s not only vital to realizing the full value of your business when the time comes to exit, but more importantly, it’s a critical aspect of your fiduciary duty – a commitment to ensuring the continuity of care for clients who have entrusted you to protect their financial future.

Succession planning remains a topic of great concern and considerable discussion within the advisory community. You undoubtedly have seen numerous research studies highlighting the widespread neglect of succession planning in the profession – the dangers this poses not just to the individual firm owners, but to the profession as a whole. The lack of path between the current generation of financial advisory firm owners and those behind them is nothing short of an alarming crisis.

But where do you start? What exactly should you be looking for when hiring and identifying the future leaders of your firm?

We’ve all seen the sobering statistics. The average age of financial advisors in 2019 is about 55, with roughly one in five age 65 or older. And yet:

• Nearly three quarters (73%) have no clear written succession plan;
• Even those within five years of retiring, more than half (60%) don’t have a plan; and
• Far too many (47%) next generation advisors don’t know if or how they fit into the future firm.

Keep in mind that these are self-reported percentages, so the reality of the situation may be far worse. The lack of a clear path to transition remains perhaps the largest potential breach of fiduciary duty in our industry today – with the continuity of care and financial well-being of countless clients hanging in the balance. For most advisors (both firm

With nearly half of the advisor population (43% according to Cerulli) over the age of 55, it raises two critical questions. Who’s going to take care of all your clients when you finally decide to retire? And how are you going to be able to successfully monetize your life’s work? The short and simple answer for the vast majority of advisors is to step up and do a far better job at cultivating and nurturing the next generation. 

A mere 3% of today’s advisors have a written continuity plan to protect their business (and more importantly their clients’ best interests) in the event of their death or disability. Fewer than one in three (31%) advisors age 60 or older have a formal written succession plan in place. For a profession that prides itself on planning and preparing clients for the future, most of you are doing a pretty horrible job when it comes to planning your own.

Perhaps no generation is as misunderstood as millennials – the people who represent the future of our financial services business. We tend to haphazardly paint their ranks with an incredibly broad brush as self-centered narcissists, lacking all manners in social skills as a result of growing up behind a computer screen.

Spend any considerable amount of time with these 20-somethings, however, and you quickly begin to realize how socially-aware, compassionate and relationship-oriented so many of them are. They simply have a different approach to communicating and engaging than previous generations.

But what if that millennial is your own kid, and possibly the future leader of your firm?

Let’s start with a few irrefutable facts. Today, the average age of financial advisors in this country stands at 50.9 years old. According to Cerulli Associates, over the next ten years the transition of advisors into retirement will be unprecedented – involving 35% of wirehouse advisors, 25% of independent broker-dealer advisors and 30% of RIAs. A decade from now, more than one out of every four of you will have left the business.

The question is…what will happen to all those clients? Who will provide a continuity of care?

These are perhaps the three most important benchmarks by which wealth management practice success is truly measured. Yet, many advisors struggle with drawing clear distinctions between the three. It’s understandable, as there are a number of areas where the definitions overlap and tend to blur into each other.

The purpose of all three is the same – to help you make yourself less relevant in the day-to-day operation of your business. That may sound a bit jarring, I know, but understand that I'm not talking about making yourself any less important, just needed in different ways as your business evolves.

As a conscientious advisor, you take your fiduciary duty to your clients quite seriously. Your entire raison d'être is to serve as their voice of fiscal reason, advising and planning to help ensure they’ll be financially well-protected. Yet when it comes to planning for your own legacy, most of you are woefully unprepared as regards to your single most valuable asset – your practice.

Far too many firm principals convince themselves that they have a succession plan in place, when in fact what they actually have is some vague idea of what they hope will happen. In my new book, “You've Been Framed,” I shine a light on the ultimate advisor hypocrisy I call the "The Big Fat Lie". You swear up and down to your clients that you’ll be there with them through every life transition…but truth be told, you really don’t have a plan to ensure delivering on that promise!

Succession planning is the buzzword of the year. People are discussing it in every office and reading about it in every publication, but so few of us are actually doing it. Statistics show that only one-third of financial advisors have even started thinking about succession planning for their businesses, while those who have are so close to retirement that their efforts might all be for naught.

Sometimes a task that feels like back-tracking can actually give you the momentum to move forward. Our discussions surrounding succession planning have led many of you to ask some significant questions regarding your business: How are you running it today? How would you want it to run in the future? How do you imagine it will continue to run in the event that someone else takes it over?

Did you ever consider that an untapped asset in your corner could be those people whom you view as your greatest competition? A mistake many advisors make when building out their center of influence and professional advocate networks, is that they fail to consider including the people who do the very same thing that they do within their network of resources.

In his best-selling book, Built to Sell, John Warrillow writes what appears at first glance to be a guidebook for creating a solid sales platform. In actuality, the tips outlined help solve one of the biggest challenges of running a sustainable financial advisory business: The art of creating value in your business that is separate from you as the founder or owner. While geared to benefit any business, many of these tips can be applied directly to our industry to help advisors prepare for the eventual succession of their business.


According to Fidelity research, 75% of financial advisors have no succession plan for their businesses. Many advisors ignore the importance of succession planning because, at their most successful, they feel invincible. This is an understandable and powerful feeling that leads 43% of advisors to believe they’ll work "forever". They don't consider succession planning a “top of the list” necessity.

Teaming is becoming an increasingly popular way to provide improved wealth management services to increasingly sophisticated investors seeking more comprehensive and effective guidance with their financial planning and investments. In most cases, a partnership is as beneficial for the advisors who partner as it is for the investors who work with them. In fact, our ClientWise statistics indicate that practices with multiple partners generate on average 38% more revenue per team member and manage 97% more assets than their solopreneur peers.


And yet anyone in the industry will tell you that partnering isn’t a simple endeavor. More financial advisors choose to work alone rather than attempt to build a partnership or financial advisory team. Why? Because, like any relationship, problems arise when they haven’t fully explored how their current and future endeavors will align. Avoid this problem by asking yourselves the following questions before partnering with another financial advisor: