Advisers unprepared to pass torch

Even though 51% of independent financial advisers are over the age of 50, few are prepared to retire and a large number don’t have a succession plan, according to a report by Tiburon Strategic Advisors (Calif.)
While 53% of fee-only financial advisers and half of independent reps intend to sell their businesses upon retirement, few have actually generated a succession plan, according to “Financial Advisors Mergers & Acquisitions: A Comprehensive Overview of Succession Planning, Firm Valuations, & the Growing Acquisition Market for Financial Advisors.”
However, the report found that few advisers — 45% of fee-only advisers and 29% of independent reps — have succession plans in place.
Among the acquisition activity that does take place, 60% of independent financial advisers said that they have either thought about or are attempting to merge with other firms and some of the acquisition activity.
The report also found that the aging population of independent advisers could be a crisis or an opportunity for independent broker-dealers and custodians.
Independent broker-dealers and custodians that help facilitate the acquisition of advisers may be better positioned to capture the asset transfer as advisers retire, the report stated.