It’s a daunting undertaking – passing your hard-earned book into the hands of another.
After 30-odd years of forging client relationships, building a referral base and ensuring hundreds, perhaps thousands, of people are financially set for the rest of their lives, you’re expected to give it all away to the next up-and-comer?
But your time to retire will inevitably come, and it’s best to be as prepared as possible when it does.
Despite this, according to a report, The Future of Practice Management
, released in January by the Financial Planning Association, almost half of financial advisors aren't set up for their retirement.
The poll, which surveyed about 2,400 financial service professionals in the United States, found that 46 per cent of financial advisors do not have a retirement plan themselves, yet 40 per cent are planning to retire within the next 14 years.
On top of that, only 25 per cent have a succession plan in place to ensure business falls into the right set of hands. This percentage increased slightly by age, with 31 percent at ages 60 to 64 and to 41 percent at age 65-plus, knowing who was going to take over their book.
“Though some advisors may not be ‘practicing what they preach,’ a likely culprit for their inability to plan for their own future may fall squarely on a simple lack of time,” the report states.
Winnipeg-based financial advisor, Doug Lochhead, of Granite Financial Group, believes avoiding the succession plan – one of the advisor’s most challenging tasks – is a huge problem for the industry today.
“It’s going to be a real issue for the industry,” he says. “We provide a very specialized experience based on advice … there’s going to be a lack of people through the advice channel, other than the banks.” (continued)