Many Financial Advisors Are Not Planning for Succession

Posted on November 6th, 2014 at 10:01 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Only one fourth of advisors have a written succession plan. Why is this? Advisors inform clients about the importance of planning and yet have not generated plans for succession themselves.  One of the main reasons is that advisors do not like to think about having to value his or her practice. Understandably, that can be a stressful topic because the advisor must analyze profitability and client retention.

Nonetheless, often times the size of the firm determines what options are available for succession. If the firm generates less than $100 million, there usually is a successor in house. Therefore, firms may look internally. On the other hand, firms worth upward of $750 million must find alternative solutions for planning. Simply, people who do not plan to retire for another 15-20 years do not acknowledge the need for succession planning at this time.

Related Attorneys: James J. Eccleston

Tags: Advisors, Succession plan, Succession

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