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David Werdiger's Familosophy

Risks for Family Advisors & 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?

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