Study: Transfer of Clients Among Biggest Succession Worries for Advisors

| June 12, 2017
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It’s common sense that firms without a succession plan risk the loss of both clients and referrals. As advisors get older, smart investors naturally begin to wonder about whether their advisor has a succession plan in place.

While it’s not easy for any entrepreneur to give up control of a business he or she created from the ground up, advisors who don’t have a succession plan in place can unknowingly undermine the growth of their client base and AUM in their remaining years of business. It’s a industry-wide problem in which 60% of advisors do not have a formal written succession plan in place, according to a 2014 Cerulli Associates study.

So why do advisors put off such an integral part of their practice’s long-term success? The complex and intricate process of succession planning can take an emotional toll on all who enter it. According to Cerulli, the biggest worry of advisors retiring in five years is the transfer of their client base followed by practice valuation, finding a qualified successor, and structuring deal terms. 

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