Internal Successions On The Rise

After years of mass consolidation and open market sales marked by big payouts and ever increasing multiples, advisors are now looking inward for a succession strategy.

Why It Matters: The trend moving away from external successions to internal successions marks a major attitude shift in the industry. Once dominated by lifestyle practices and founder centric brands that were more about meeting the needs of a single advisor, the advisory industry is shifting toward a team/enterprise model focused on longevity and collaboration.

  • The number of team-based practices increased by 25% since 2012, with more than half of all practices operating in some type of team model.
  • A lack of “new blood” has plagued the industry, while nearly 40% of advisors are expected to retire over the next decade.
  • The looming “succession cliff” has prompted industry leaders and advisors to actively recruit and train new advisors from colleges, as well as middle aged professionals in search of a “second act” career.
  • Founder goals have moved away from traditional “retirement and money” aspirations to more “legacy” driven goals. Many advisors now wish to build a thriving business that can continue on with out them, while cultivating Nextgen leaders who can carry the torch into the future.

Take Action: If done well, internal successions lead to better outcomes for founding advisors, successors, staff, and clients. Here’s what you can do to take action now:

  • Build The Succession Pipeline: Actively recruit “right fit” staff for a variety of positions. Pair recruiting efforts with training and development programs to cultivate new advisors that can grow into practice leaders.
  • Leverage Experts: Work with succession consultants to help structure and implement succession plans that make sense for your unique practice. They can help you identify blind spots, generate legal agreements, and coach you and your successor toward a positive outcome.
  • Put It In Writing: Always get it in writing, preferably with the help of a third party succession consultant and legal team with experience specific to the financial advisor industry.

Get Help: If you’re not sure where to start, our team of succession experts can guide you. There is no cost or obligation for speaking with us.

Go Deeper: We developed two white papers to guide you through the decision to go the internal succession route, and what founders and successors need to know to develop, finance, and execute a sound transition plan.

Learn about the benefits of internal successions, review key questions to ask before committing to an internal succession, and read case studies from other practices who have done internal successions.

In this white paper, we team up with PPC LOAN to provide a comprehensive guide for founders and Nextgen advisors to prepare for, structure, and finance an internal succession.

Start Your Internal Succession Journey

Our Turnkey NextGen Deal Support service lets you design a succession with a trusted internal advisor. We provide you with the flexibility to sell in tranches or through a single transaction.

About the Author: Shennandoah Connor

As Vice President of Revenue Operations, Shennandoah works closely with our internal Subject Matter Experts to create initiatives and educational content to empower financial advisors throughout every stage of their career. She leads our strategic partnerships with industry leaders and Broker Dealers/Custodians, along with other marketing and business development initiatives designed to connect advisors with valuable resources and services.



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