Advisor Succession Planning

Contents

1. What the research keeps finding
2. Why the plans go unwritten
3. The forms a transition takes
4. What a written plan has to settle

Brent O’Mara is a cofounder of WealthPlan Group, an Omaha based organization that supports independent financial advisors, and the question of who takes over an independent practice when its owner stops is one the industry has measured again and again. A useful date to start from is November 9, 2014, when WealthManagement.com published its compensation survey, in which nearly half of the advisors who answered said they practiced alone, a fifth said they shared an office and overhead with other advisors but little else, and only a third described themselves as part of a team building one business.⁶ The article concluded that succession was a hard question for solo practitioners, many of whom struggled to tell clients how a fifteen year plan would be carried out when they themselves were likely to retire within ten.⁶

What the research keeps finding

The numbers have not moved much since. A 2026 column in Financial Advisor cites Cerulli Associates for the finding that 47 percent of financial advisors are now over 55, and that fewer than one in five have a structured succession plan.³ A second column in the same publication, from October 2026, reports Cerulli’s August figures: 35 percent of advisors, managing about 40 percent of industry assets, plan to retire over the next decade, and about one in four of those nearing retirement remains unsure of their plan.⁴ Financial Planning quotes the chief executive of a succession consultancy who, asked what share of independent practices have a formal plan, put it at about 10 percent when rounding up.¹

Figure

The scale of the problem

of financial advisors plan to retire within a decade

35 percent

of industry assets are managed by those advisors

About 40 percent

of the advisors nearing retirement remain unsure of their plan

1 in 4

The CFP Board gathered the earlier generation of the same statistics in a 2020 article. Cerulli expected one third of advisors to retire over the following ten years, the Financial Planning Association found only 28 percent feeling very prepared to transition their business, and among the smallest practices, those with under $50 million under management, only 13 percent reported a plan at all.⁷

Why the plans go unwritten

The obstacles are partly practical and partly personal. A 2026 survey of 233 advisors, reported by Financial Planning, found 71 percent reluctant to contend with the complexity of succession planning, 61 percent wanting new owners they could trust, 27 percent anxious about a fair valuation and 25 percent feeling the matter was too far in the future.² Nearly 60 percent of senior advisors in that survey planned to hand down their practices within five years, yet only 42 percent of all respondents had a fully documented and formally legal plan.²

Figure

Obstacles advisors name

• Complexity of succession planning71
• Finding new owners they can trust61
• Obtaining a fair valuation27
• Succession feels too far away25

The Financial Advisor column written with a licensed counselor explains the personal half: advisors tie their sense of purpose and identity to the profession, and the thought of stepping away can bring feelings of grief and identity loss that mirror what people feel in other major life transitions.³ Financial Planning adds two structural reasons. The move from commissions to recurring advisory fees made practices more valuable and, in one consultant’s words, removed the need to plan at all, since the owner can keep collecting; and the basic S corporation structure most practices use prohibits different classes of ownership, which makes compensating successors with equity difficult for founders reluctant to part with it.¹ Those features belong to the wider question of how independent advisory practices are organized, and any change to an entity’s structure turns on individual circumstances; qualified professionals in law, tax and finance settle it in practice.

The forms a transition takes

The research describes four routes. The first is internal succession, in which employees or junior partners buy in over time. Financial Planning’s experts say this takes about a decade, because future owners must be developed, responsibilities transferred and the economics worked through, so that practices hoping to retire within ten years by this route may already have delayed too long.¹ The CFP Board article, drawing on a consultant’s book, argues that founders are often better served by an internal plan than by an outside sale, that an annual valuation helps an owner understand what drives the number, and that compensation tied to profits rather than to each advisor’s own revenue makes a buy in easier.⁷

Figure

How prepared advisors said they were

of advisors felt very prepared to transition their business

28 percent

felt somewhat prepared

34 percent

of advisors at the smallest practices had a succession plan

13 percent

The second route is a sale to an outside buyer, often a large consolidator. The CFP Board notes that such buyers often pay only a small percentage of a practice’s value in cash at closing, with the rest earned over time as a share of yearly revenue.⁷ The October 2026 column describes what can go wrong: the retiring owner is paid well, the acquirer captures the revenue, and the clients and the next generation advisor are left out, the former absorbed into a standardized service model and the latter handed a book of business without a path to ownership.⁴ The third route is a merger with another practice, which the 2014 piece presents as a way to gain scale and, where one partner is older, to settle succession.⁶ The fourth, described by WealthManagement.com in 2023, is a broker dealer buying its own independent affiliates and converting them into employees under multiyear agreements, at a valuation that may be lower than the open market would pay.⁵ Whether a practice sits within a Registered Investment Advisor or a broker dealer shapes which routes are open to it.

What a written plan has to settle

A plan is a document, not a sentiment. The CFP Board’s continuing education catalog lists a session describing succession planning as a critical aspect of fiduciary duty for all Registered Investment Advisors, one that many have not formalized.⁸ Financial Planning’s series includes the account of a practice where an informal agreement between trusted partners felt sufficient until a founder died before the plan had been formally completed.²

The honest limit is that a documented plan settles ownership and timing and nothing else. The October 2026 column argues that the measure of a succession is not whether assets are retained but whether clients feel cared for rather than transferred, and whether the next generation feels empowered rather than employed, and no document can promise either.⁴ Whether a profession built on independence can solve a problem that independence helped create is the thread picked up in the rise of the independent advisor.