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Advisor succession planning: Managing the retirement of Baby Boomer advisors

The current entrepreneurial operating model and looming demographic shift are making advisor succession a critical issue for wealth management firms.


As Baby Boomer advisors begin to exit the workforce en masse, wealth management firms will quickly discover that cutting checks for retiring advisors is an unsustainable client retention strategy.

Current financial advisor operating models are entrepreneurial. Advisors often sell their books to the highest bidder without fully considering the impact to their firm. Many wealth management firms “cut a check” to retiring advisors to retain clients during advisor succession, and while the practice of swaying retiring advisors is not new, it will be significantly tested by an imminent demographic shift. There is an opportunity for firms to not only address the issue of Baby Boomer advisors retiring, but also to transform their business to manage succession more effectively.

Watch the podcast on the right to learn more about this critical issue for wealth management firms, and the steps they can take to improve advisor succession and client retention.

Advisor Succession Planning with Kendra Thompson


Wealth management firms face two challenges relating to advisor succession planning:

The advisor operating model
Most firms maintain an entrepreneurial model, which allows advisors to freely manage client relationships. This model often translates to firms having limited visibility into the retirement plans of their advisors and frequently results in retiring advisors taking one of the following actions:

  • Sell and move on—An advisor sells his or her book of business to another advisor who may or may not be within the same firm.

  • Merge and stay involved—An advisor partners with a complementary practice, resulting in the potential for the firm to lose the client through an external merger or it could result in a lower level of service for the client.

  • Internal transition—An advisor grooms members of his or her practice to take over. This could lead to a loss of momentum in client growth.

The demographic impact
Not only do the advisors facing retirement manage the majority of clients’ assets, but they also often manage the most valuable books. According to research by Cerulli, advisors over 60 years old control $2.3 trillion in assets. The average age of advisors is approximately 50 years old in the United States, and:

  • Twenty-one percent of the workforce is over 60 years old.

  • Less than 25 percent of advisors are under 40 years old.

  • Only five percent of advisors are under 30 years old.


Firms should take immediate action to begin addressing the advisor succession challenge. They should initiate candid discussions with advisors who are close to retirement to gain a better understanding of their objectives and develop succession plans and processes that are beneficial to clients, advisors and firms.

Wealth management firms can create a more robust operating model that produces sustained business outcomes by examining the following levers:

  • Capabilities—Build a compelling value proposition. The use of analytics can enable an advisor’s business and differentiate a firm from its competitors.

  • People—Enable collaboration and teamwork for stronger client relationships.

  • Brand—Build reputation and affinity.

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