5 Difficulties Financial Advisors Face in Succession Planning

Planning for retirement isn’t really an easy task for anyone, no matter what business they might be in. As a financial advisor, you know that better than anyone. You’ve probably spent your career helping others plan for their retirement while only dimly considering your own. Now that it’s approaching, you probably have a new appreciation for the difficulties of retirement planning. As a financial advisor, there are a number of unique difficulties you’ll face when it comes to creating a solid succession plan.

5 Difficulties You’ll Face in Succession Planning

Financial advising is your identity.

For many independent financial advisors, this isn’t just your day job: it’s your identity. You live and breathe financial advising and know your clients’ portfolios inside and out. Separating yourself from the job is more than a physical separation, it’s a mental and emotional one, too. You’ll need to find ways to gradually take yourself away from the business. Quit it cold turkey and you’ll be back at it in a few years time.

You have a close relationship with your clients.

Financial advisors aren’t just bankers or someone clients meet with once a year and never think about again. As a financial advisor, you build a close relationship with your clients. You know everything about their personal finances as well as their hopes and dreams for the future. You’ve worked with them to make those dreams a reality. If you don’t retire with peace of mind knowing that they are being well cared for by their new advisor, you won’t be comfortable with leaving.

There aren’t enough new financial advisors to take over.

There are a great number of financial advisors retiring in the next 10 years. When you compare that to the number of financial advisors entering the workforce, you’ll instantly see an issue. There simply aren’t as many qualified financial advisors as there used to be. This can make it difficult to find someone who is a good personality match, in the right location, and with the right experience to take over your book.

The next generation does things differently.

You probably dedicated yourself to your clients seven days a week. They could call you anytime of the day or night and find you in the office, looking for the best ways to manage their portfolios. The next generation of financial advisors is going to work a little differently. They revel in the freedom of being their own boss, and might not have a dedicated work space outside of their local coffee shop. They might not even have set hours. You’ll need to acknowledge that just because it isn’t the same way that you’ve worked, doesn’t mean it’s the wrong way. Allow them some flexibility or else you’ll never be ready to retire.

You have to carefully transition yourself out.

Retirement for a financial advisor can’t happen overnight. Financial advisors who try to transition themselves out of their book too quickly often return to the job within a few years or feel like they can’t ever really retire. You can retire, but it will take some time and some planning.

How to Overcome These Difficulties

The key to overcoming the difficulties of retiring as a financial advisor is this: planning, planning, planning. Give yourself plenty of time to create and execute a successful transition plan. Working with an experienced successional planning firm can help make your transition much easier. They can give you the tools that you need to gradually ease your clients over to a new advisor, and can even help match your clients with an advisor who they will love. If you are ready to overcome the difficulties of succession planning and successfully retire, contact the advisorRETIRE™ team today.