You’ve Planned for the Future of Your Wealth, but What About the Future of Your Financial Advisor?

What to Expect from Financial Firm Succession in an Aging Wealth Management Industry

All businesses must concern themselves with succession planning, especially in the years to come, and wealth management firms are no small exception. For example, according to the American Institute of CPAs (AICPA), 75 percent of CPAs will be retiring within the next 15 years, and you should expect to see a similar trend across all key advisory industries.

Fortunately, financial advisors are in a great position to fully understand this type of transition, and how to do it right, so your wealth management needs remain in good hands.

How to Navigate the Uncertainty of an Advisor Transition

As an investor, you’ve likely spent your adult life saving and planning for your financial future, and it can be easy to forget that at some point, your advisor may be retiring. There are many types of wealth management firms out there, and you should be sure yours has its own succession strategy.

When meeting with your advisor, remember that the conversation is a two-way street. Your portfolio and plan are obviously the focal point of any discussion, but do not be shy in probing your advisor about their future as well.

Here are three key questions to ask:

1. Have they determined a target date for their retirement, and if so, how far off is that date?
2. Does their staff have the capacity and the ability to take over your relationship seamlessly?
3. Will they be looking to sell their book of business to another advisor?

A caring advisor will keep you in the loop, and they know the last thing you want is a big surprise when they leave. There may have been many team members who worked on your relationship over the years, but there will typically be one individual who has remained a constant, and they are the pillar that holds up the roof over your head. Do not let them leave you hanging.

How to Prepare for the Future of Your Wealth Management Needs

No matter how your advisor hands off the relationship, you will inevitably face something new. As younger advisors rise through the ranks, they bring with them new approaches to doing business and interacting with clients.

Technology has already fundamentally changed the way that we interact with each other. But have our advisors kept up? With a younger workforce of financial advisors on the horizon, there will be new methods introduced and implemented to increase efficiencies, improve communication, and connect you more effectively to your investments.

It’s also important to be aware that as financial advisors retire, they will likely not be replaced on a 1:1 ratio. Without technology, these potentially larger workloads and increased client bases would be difficult to manage. However, new systems are moving the financial management industry in a more efficient direction.

Your financial future is what matters most, and any succession within a financial advisory firm should be focused on maintaining that commitment. The implementation of new technologies and methodologies should not compromise the integrity, ability or personality of your advisor. You should always feel as though you trust in the process, no matter how new it may be, and that you have an advisor to reach out to with questions or concerns.

Embracing the Succession Strategy of Your Financial Firm

Asking the right questions, and being aware of what lies ahead are key to being prepared for change.

Retirements and firm consolidations will undoubtedly impact you in one way or another, but you are not alone. You have entrusted your future with your advisor, and they should never take that lightly. In finding the right successor, they should welcome the opportunity to introduce you to something different, but equally appropriate.

At Lake Street Advisors, we became a member firm of Focus Financial Partners. Through this partnership, we were able to put in motion a change that will ultimately serve to protect and preserve our client relationships indefinitely. We welcomed Buddy Webb and Melissa Olszak as new partners within the firm, and we will have the flexibility to continue growing while remaining true to the core values that clients have come to know and appreciate.

Learn more about our approach to financial management.