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October 30, 2013 at 09:46 AM
Private Advisor Group is launching a program to provide advisors’ families double their trailing 12-month advisory revenue in the event of their death.
“Our firm, Private Advisor Group, is going to take on the risk,” Pat Sullivan, managing director of Private Advisor Group, told ThinkAdvisor on Wednesday. “We will pay two times their trailing-12 advisory fee business, and we’ll pay that over the next four years. It doesn’t matter how many assets stay with the firm, the advisor and his family will get that two times the trailing-12 advisory business.”
In addition to the benefits paid to advisors who sign a formal buy-sell agreement with Private Advisor Group, the firm will find a new advisor to take on the deceased’s clients.
“Succession planning is something that’s important to advisors, and we find that still only 10% of our advisors have a formal succession plan,” Sullivan said. “We feel that they’ve done a great job of building up their business and working with their clients, but we feel like there’s a hole out there. If something happens to them, they’re not getting value for what they’ve built up, and their clients potentially don’t have a great advisor to work with.”
