Advisors are broadening their tents, stretching out curtains, lengthening cords and strengthening pegs, to paraphrase the prophecy of Isaiah, who described an ecstatic vision of expansion born of optimism — a feeling not unlike that expressed by advisors in a recent survey.
Of some 500 advisors in a recent SEI Advisor Network survey, 96% reported being optimistic or excited about the new year. This year’s 20%-plus stock performance, following on several years of new market highs, probably has something to do with the euphoria.
In its survey, the provider of separately managed accounts asked advisors about their most cherished objectives for the new year.
Advisors’ fifth most pressing priority for 2015 is…
New Year’s Resolution No. 5:
Alleviate Succession Stress:
At a time when the majority of advisors are over age 50, succession planning has never been more important. There are three general approaches to succession — selling the practice, acquiring another practice or transitioning firm leadership. All send a vital signal to clients that the business will be around for the long haul, Anderson says.
“You have aging advisors who want to slow down or retire,” Anderson says. “They have worked for years and may need to monetize their businesses. I think this is one of the biggest challenges in our business today, but most advisors will let their business wither away. Putting a [succession] plan in place, or just as important a continuity plan, shows clients the advisor is serious about a multigenerational business.”
New Year’s Resolution No. 4:
Rejuvenate Your Practice
With the millennial generation now at about a quarter of the U.S. population, Anderson says an aging advisory practice needs younger staffers and younger clients to ensure its long-term viability.
“Advisors are aging and — just as important — so is their book of business,” he says. “Sooner or later businesses will see assets declining as aging clients begin to draw down. Advisors that want to run a multigenerational business are going to have to find ways to grow the book over the outflow. By recruiting younger advisors, you are building your succession plan and can develop services, and a brand, that services the younger clients.”
New Year’s Resolution No. 3: