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How to Advise Advisors When It’s Their Turn to Retire

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As a financial advisor, you likely have some clients who can’t wait for retirement and look forward to the next stage, while others are hesitant and don’t feel ready to consider the next step. In both cases, you play a key role in preparing them for retirement by developing a holistic plan, and in the latter case, you may serve as a sounding board to help them overcome anxieties, fears and worries.

And yet, advisors don’t always prepare themselves. Concerns about financial stability, a fear of missing out and ultimately a worry about not being happy can cause a financial advisor to avoid even considering retirement.

(Related: Why It’s Time to Redefine Advisor Success)

In succession planning, we realize some of these fears can be overcome with proper planning and sharing of best practices. In 2018, Raymond James surveyed advisors who have retired in the past four years to gauge how satisfied they are post-retirement and to gather advice they would have shared with their pre-retiree selves about the transition to retirement.

Will Retirement Be Fulfilling?

It’s a natural question for clients and advisors alike: Will the grass be greener in retirement? The answer may serve as a relief. Most retired advisors (92%) indicated they were satisfied with their life in retirement, and of those, nearly four out of five were very satisfied. The majority of advisors cited that free time and flexibility were not only their primary reasons for retiring, but also have become the most enjoyable aspect.

Advice for Advisors

Our survey aimed to learn more about advisors’ happiness post-retirement, but also what they would have done the same or differently, knowing what they know now. Common advice emerged.

  • Find the right successor.

An overwhelming majority (77%) felt they did a great job finding and preparing their successor before retirement.

This is not an easy task. The practice you built over time represents clients who have relied on your guidance, expertise and overall concern for their financial well-being for as long as you have been their advisor. Finding the right fit for your clients and staff takes time. Advisors who have succeeded have identified the non-negotiables that are important to their clients, staff and practice and have developed criteria on fit, geography and timeline. The right fit requires thoughtful consideration of client management style, investment philosophy and the goals of potential successors to ensure they align with the ongoing care and needs of your clients.

  • Ensure you have clear, proactive client communication.

The majority of respondents (62%) felt their client communications leading up to retirement went well and were integral to successfully transitioning their book.

Retired advisors stress the importance of allowing enough time in the transition period to communicate with clients. Making sure clients had ample time to get to know their successor, and that he or she had the opportunity to build his or her own relationships with clients before retirement, were critical to their success. Take inventory of your clients who may be high-risk for attrition during a transition, and spend additional time ensuring their questions and concerns are addressed well in advance. The most seamless transitions involve a solid communications strategy, reaching out to clients both early and often.

  • Keep in touch.

After a long career, some advisors feel a sense of loss of community once they retire. An important part of bridging the gap to retirement is maintaining personal relationships with friends or former colleagues, as many of our survey respondents noted. Finding the frequency and style with which you are comfortable is a personal choice, but on average, retired advisors noted they touch base with their successor and staff more than once a month.

Many retired advisors said the most enjoyable aspect of their career was doing meaningful work with their clients, and frequently the appreciation is reciprocal. Genuine friendships develop, and clients are often grateful for the years of service and look forward to continuing the relationship post-retirement. 86% of advisors keep in touch with their clients on a personal level, whether sharing meals, golfing or attending events together. The survey results confirm the connections that have grown out of the meaningful work done by advisors don’t end with retirement.

Set Yourself Up for Successful Succession

Conventional wisdom indicates the typical succession plan should begin about five years before a planned retirement date, but no matter where you are in your career, it’s never too late to create a succession plan – and it’s certainly never too early. An overwhelming number of respondents recommended planning early.

Ensuring a successful transition to retirement requires a great deal of preparation. Most advisors find it helpful to take advantage of succession planning resources or programs their broker/dealers offer. In addition, it can also prove valuable to connect with colleagues or even clients who have made the transition themselves and ask them to share their experiences. You may be surprised that it isn’t as painful as you think.

— Robert Goff is Vice President of the Succession & Acquisition Consulting Group at Raymond James.


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