Hiring an investment advisor to help you properly prepare for retirement is a smart play. But, have you ever stopped to consider whether your advisor has planned for his own retirement—to ensure you aren’t left adrift when that happens?
If you think most advisors have succession plans in place, you’d be wrong. A recent report from FA Insight noted that less than half of surveyed advisory firms (44%) said they have adequate succession plans. Pair that with the news that the number of firms with owners three or less years from retirement has more than doubled since 2011—and you have a recipe for misfortune.
If your advisor doesn’t have a succession plan, you could be stuck shopping for a new advisor when you’re retired, or worse, later in life when you aren’t as prepared to make such an important decision. All the carefully orchestrated plans you’ve made for your future could be in jeopardy.
How can you ensure you don’t end up advisor-less at a critical stage of your financial life? A good place to start is by asking your advisor what plans he’s made to maintain client care after his retirement. You might phrase it this way: “You help me prepare for the worst in my life, but are you prepared for the worst in your life?”
It’s especially important to know if your advisor has a succession plan if he’s a sole practitioner. Ask him if he’s thought about what his retirement will mean to you and if he’s made any plans to eliminate your anxiety, perhaps by reaching out to other advisors with a shared philosophy who could step in immediately to continue your service without a wrinkle.
Working with an advisor who is part of a firm doesn’t mean the question of succession is moot. Ask if the firm develops new talent organically (hiring younger advisors) and whether its advisors are laddered somewhat evenly across generations rather than all nearing the end of their careers.
Your best bet is to be proactive when it comes to determining if your advisor has a succession plan. Don’t leave this important issue to chance, and certainly don’t assume every advisor has a plan in place to ensure your needs continue to be met after he retires.
Other articles filed under Your Financial Advisor
October 31, 2017 - This article is for individual who are considering opening a business or changing their business entity and are looking for a basic overview of the major types of business entities. To find the best fit for your situation, however, we...
September 25, 2017 - You may not consider your 55th birthday as a milestone, however, there may be more reason to celebrate than you think. At the age of 55, several options for tax savings become available for those considering selling and repurchasing real...
September 12, 2017 - You may have read that hackers broke into the Equifax database and stole personal information tied to 143 million Americans. The hackers accessed people’s names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. They also...
September 5, 2017 - We’re quite aware you have many options when it comes to choosing a wealth management firm to help you achieve your financial goals. For that reason, we believe it’s important to be able to clearly communicate our value proposition —...
August 31, 2017 - A recent report revealed that the S&P 500 Index has closed at 42 news highs since July 11, 2016. That’s the day the S&P 500 hit its first all-time closing high in almost 14 months. A quick review of data...
- Forbes Names Joshua Wilson Top Next Generation Wealth Advisor
- What is WorthPointe’s Value Proposition?