Most advisers concerned about succession plans, survey reveals

Although financial advisers think that succession planning is important, many also believe that they aren’t getting enough help preparing for that transition, according to a new survey conducted by Mathew Greenwald & Associates Inc. for John Hancock Financial Network.
The research company performed a blind poll of 516 advisers from a variety of firms for its 2009 John Hancock Financial Network Equity and Succession Survey. Fully 63% said that succession planning is a concern for them, while 55% of the surveyed representatives said that the financial services industry hasn’t done a good job of helping them with succession planning.
Less than one-third (31%) of those surveyed have worked on a succession plan. Another 34% of the respondents said that they have thought about succession but haven’t done anything yet, while 35% haven’t even thought of how they will transition their practices.
Respondents had a wish list of succession-planning services, with 72% saying that they want help getting a valuation for their investment business and 67% saying they want financing help for the transition. And 65% said they want help with getting a valuation for their fee-based and insurance businesses.
Fifty-eight percent said they have also sought help with finding a successor.
However, a smaller percentage has actually received those services.
Forty-two percent of the reps received valuations for their investment businesses, while 40% said that they received a valuation for their fee-based business and got help finding a successor. Meanwhile, just 34% said that they were able to obtain help with financing for the succession, while 35% were able to get a business valuation for their insurance book.
The services matter enough that 66% of those surveyed said that a strong succession program offered by a rival financial services firm would be a deciding factor in whether they switched companies, with 20% saying that those services would be a major factor in deciding to jump ship.
“Succession done right fosters the growth of younger reps by encouraging mentoring and collaboration between different generations of advisers,” Brian Heapps, executive vice president of sales and business development at John Hancock Financial Network, said in a statement. “Our industry needs to develop good programs if we’re going to retain the knowledge of our senior advisers and keep up with the country’s investment and insurance needs.”