The Importance of Having a Successful Succession Plan

Investment advisors are familiar with the need to have difficult conversations with clients. Any number of anticipated or unforeseen situations, such as the loss of a job or a serious family illness, can prompt the need to revisit a client’s investment plan and tailor their asset allocation plan to deal with significant life changes.

Addressing a stressful situation with investors, however, often is easier for advisors than confronting the critical responsibility of having a succession plan in place to provide peace of mind for you, your employees, and your clients.

The global pandemic, ongoing cybersecurity concerns, and the effects of climate change have prompted regulators to sharpen their focus on the importance of business continuity plans, which should include provisions for expected or unexpected losses in personnel to help mitigate business risk. Nevertheless, a 2018 study by the Financial Planning Association found 73% of advisers lack a written succession plan, and 60% of those within five years of retirement don’t have one[1]

The study found that smaller firms are in a worse position than larger firms. Of firms with less than $50 million in assets under management, only 13% have a written succession plan compared with 60% of those with more than $500 million in assets under management[2].

That fact is exacerbated by J.D. Power’s 2019 U.S. Financial Advisor Satisfaction Study that cited the average age of financial advisers to be 55, with approximately 20% of advisers 65 or older[3]. DeVoe & Company, an RIA consulting firm and investment bank, places the average age of an RIA owner to be in his or her early 60s, but adds that 57% of advisors lack the confidence that their next generation of staffers are ready to run the firm[4].

Those numbers are consistent with findings by Cerulli Associates, a research and consulting firm specializing in asset management and distribution trends worldwide, that say  one-third of advisors are expected to retire over the next decade, putting almost 40% of investable assets in play[5].

The important considerations one should undertake to create a succession plan can be daunting. Do qualified candidates exist within your firm? If not, can one or more candidates familiar with your firm’s specific business and values be groomed as potential successors? Would it be more prudent to try to sell or merge your firm when the time comes? Have you properly assessed your firm’s value? If you do sell, will some of your capable employees be victimized by a redundancy of personnel? A best practice in answering those and related questions is to retain a third-party specialist firm who can assess your specific succession needs without emotion.    

Let the Professionals at JLG Help with Your Succession Planning 

Is it time for you to have that heart-to-heart self-talk about succession planning? Jacko Law Group can help you navigate the decision-making process and develop a plan that will provide the consistency and high level of service your clients have come to expect. Contact us at (619) 298-2880 or visit us online at to schedule a consultation and cross succession planning off your important to-do list.  


[1] See 

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