The Succession Planning Mirage, and the Alternative | ThinkAdvisor by Michael Kitces
The average age of financial advisors creeps higher each year, approaching the traditional age of retirement. A growing chorus of voices have warned of the looming onslaught of advisors retiring, the lack of young talent to take over their firms, and thus a wave of advisory firms that will come up for sale resulting in a competitive buyer’s market that will make advisors regret having waited to sell.
Yet despite what has been portended by demographics, the wave of selling has not come and advisory firm merger-and-acquisition activity has remained relatively flat for years. If anything, the drive for larger firms seeking inorganic growth through acquisitions and tuck-ins has led increasingly towards a seller’s market, despite nearly all predictions to the contrary.
Given that industry studies still find the overwhelming majority of advisors have no succession plan (and aren’t taking the steps to create one), it raises the question of whether the entire succession planning crisis may actually be a mirage.