Risks for Advisors and their Clients - David Werdiger

Risks for Advisors and their Clients

Exit planning for advisors

The cobbler’s children go barefoot: Advisors don’t spend enough time thinking about their own succession and exit planning. Like most people, many are too involved in the day-to-day work. But like family businesses, exit planning for advisors is not just a financial transaction, but is also the chance to leave a legacy. 

The wealth management industry is ‘old’ – the average age of financial advisers today is about 55, with 20% of them 65 or older. Why? Because most of them have been servicing the incumbent generation of wealth holders. A similar profile would apply to accountants and lawyers servicing this group.

Research shows a mismatch between the ‘opportunity’ advisors see in the incoming intergenerational wealth transfer and tangible steps taken to address it. The wealth transfer poses a risk both for families and advisors., and both groups need to be aware of it and plan accordingly.

But who advises the advisors on managing this? I have been following this niche issue for a number of years, and will be launching a series of products including educational, knowledge base/community, and specialist consulting to advisors and their firms.

Consider This: Families: have you had an open discussion with your advisors about their ‘parallel’ transition? Rising gen family members: are you comfortable with your parents’ advisors becoming yours? Advisors: are you aware of the risks and opportunities to your business with the generational wealth transition? Have you formally assessed this?

Original articles: https://www.wealthprofessional.ca/news/industry-news/helping-advisors-pave-the-path-for-succession/331963

https://www.forbes.com/sites/forbesfinancecouncil/2020/07/27/the-psychology-of-a-retiring-advisor/?sh=53daca6f57a6,

https://www.kiplinger.com/retirement/601878/your-financial-adviser-wants-to-retire-too,

https://www.napa-net.org/news-info/daily-news/what-are-biggest-practice-issues-advisors,

https://www.ftadviser.com/your-industry/2020/11/19/advisers-slow-to-address-wealth-transfer-opportunity/,

https://www.journalofaccountancy.com/news/2020/dec/succession-issues-surge-at-accounting-firms.html

Actionable Generational Wealth Succession: For more in-depth, thought-provoking discussion points and commentary on family and business, access my Familosophy newsletter archives: www.transitionbook.co/member-area/

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement #successionplanning #workfromhome #governance #leadershipdevelopment #familybusiness #entrepreneurship

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