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Advisor’s Succession Plan Can Impact You

One question clients often ask me is “What happens to me if something happens to you?” As financial advisors, we work with clients through their “what if” scenarios on a regular basis. For instance, “What if I predecease my spouse early in retirement?” or “What if my company eliminates my position?” or “What if my assets don’t last as long as I do?” The worst-case scenario is always one to consider, while maintaining the optimism and confidence that things can go as planned—or, occasionally, better than planned. However, it’s important to consider that an advisor’s succession plan can impact your financial plan, especially a Senior’s.

CNBC recently reported that 73% lack a formal advisor’s succession plan, according to a 2018 study by the Financial Planning Association and Janus Henderson Investors.1 That means that nearly three out of four advisors may be contemplating their own retirement with no transitional support for clients who have trusted them for years or decades. And while years of planning may make moving into retirement relatively seamless, even with a new advisor, an unexpected event such as a death or sudden disability could create unnecessary challenges without an advisor who understands your individual circumstances. Advisory firms should use proper succession planning to ensure clients have the support they need in case of sudden life changes.

Why Is Continuity More Important for Seniors?

As a group, seniors (ages 75+) collectively hold more wealth now than at any point in history. Many seniors built that wealth with the assistance of a trusted advisor during their working years. Often, age biases may lead to a desire to work with professionals that are older than we are. Perhaps this is because we assume that an older advisor, doctor,  attorney, or other professional may have more experience and knowledge. While there may be some truth to that, the dilemma arises when those professionals do not attract, train and incorporate younger professionals into their practice. While long-term planning for retirement, senior housing, healthcare or estate planning is vitally important, a disruption in a trusted relationship might force seniors to seek new advisors.

How to Safeguard Against Advisor Disruption

Many investors are now attracted to fee-only, fiduciary wealth management firms versus the bank or brokerage relationship of the past. While this is a good first step, it shouldn’t be the final one in selecting an appropriate wealth advisor. Fiduciary advisors put clients’ best interests first. At RegentAtlantic, that means knowing how a family will be taken care of when I’m no longer serving as their advisor. It also means incorporating younger, talented advisors into the relationship early on so they can serve my clients many more years beyond my retirement, unexpected disability or untimely death.

As you evaluate a current advisor relationship, or contemplate a new one, here are some thoughtful questions to ask your advisor to better understand whether the person you trust with your financial future has a well thought-out succession plan:

  • When do you plan on retiring?
  • At your retirement, who will be overseeing my portfolio and financial plan?
  • Does your firm have a formal succession plan that transitions ownership to other skilled advisors?
  • How much of the firm is owned by advisors retiring within the next five to 10 years?

Advisors who are confident in their own advisor’s succession plan should be willing to share it transparently for the benefit of their clients’ long-term financial well-being. If your current advisor skirts around the questions or dismisses them as unimportant, it’s time to ask more questions about their succession plans. For more information, a second opinion on your portfolio, or questions regarding your own financial challenges, please contact me.


Important disclosure information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request.

This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.

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