Tom Sedoric and Casey Snyder, Wealth Managers

The following blog post was updated on August 25, 2020 to reflect the importance of financial literacy in navigating recent financial developments.


When your plumber who has kept your toilets flushing happily for 25 years says he is retiring, what is your plan? Demographics and professional transitions have been a topic of discussion on our team over the past few years and should be for your family as well.

Our colleague and noted demographer, Peter Francese, lectured a number of our key stakeholders more than a decade ago on the professional and demographic challenges facing our nation and our region. Few professionals consider their mortality, but any firm that doesn’t have a succession plan in place may be shirking their moral and legal obligations as a fiduciary to their clients. After all, if any professional fails to practice what they preach, then why should a client trust them or take their counsel?

This point was highlighted earlier this year with the untimely death of an adviser I know. There was no succession plan in place and the clients and team were faced with an abyss of complications. We also experienced a very capable CPA sell his practice as he slipped into retirement without a viable succession plan in place. Unfortunately, the new accounting firm lacked the customer service skills our mutual clients deserved.

Passing of the Torch

A report by Cerulli Associates, “U.S. Broker/Dealer Marketplace 2019,” found that in the next decade roughly 37% of advisors are expected to retire, which would put almost 39% of industry assets in motion.

This is a significant passing of the torch. An estimated one-third of them have no succession plan in place. The number grows to 62% for independent advisers. The profession is crying out for better succession planning and regulatory responses are lacking. Michael Rose, associate director of wealth management at Cerulli says, “It will be increasingly important that firms operate successful training programs in order to attract and train qualified advisors, integrate these younger advisors within teams for whom they can serve as a pipeline of potential successor candidates, and operate effective business succession programs for retiring advisors.”

The nature of our business is planning for the future. The best way for clients to ensure this level of planning is taking place is by simply asking, “What’s the plan for when you’re no longer here?” It’s a question clients should pose not only to older advisors, but also those who have a decade or two before retirement.

“I think our biggest concern is that when a client asks you what would happen if you get hit by a truck or something else bad happens, the response usually isn’t an acceptable one,” said Anand Sekhar, vice president of practice management and consulting at Fidelity Investments. “Many investors do care, and you should have a good response to that question.”

A Succession Plan Reduces Risk

Though the senior advisor on our team plans on working into his 70’s, the average age of our team is now 42 compared to age 59 only six years ago. We make it very clear to our clients that we have a solid and dynamic succession plan in place. One reason is to show our clients that we care and take every aspect of our fiduciary duties seriously. We want the accountability of seeing a client’s plan through to the end. Another reason is that providing a plan is ingrained in our team’s DNA.

There is also an auxiliary benefit. As Todd Clarke, the CEO of CLS Investments wrote, having a plan in place can also lead to additional firm growth:

“It gives clients confidence that the firm will be around for their lifetime,” Clarke said. “Clients will be more apt to share other assets, and their children's assets, with a firm that is going to be around for a long period of time than with a 65-year-old financial planner they really like, but who has not clearly outlined or communicated a succession plan.”

We have found this to be true for the family and friends of our clients as well.

Financial advisors without a succession plan for their practices put themselves, their firms, and their clients at great risk. A survey by Financial Planning Association in partnership with Janus Henderson revealed that 73% of financial advisors don’t have a written succession plan, including 60% of those within five years of retirement. Even more worrisome, 47% of team members surveyed reported that the lead advisor or owner had not discussed his or her retirement plans with them.   

A Planner’s Lack of a Plan

A survey of 117 financial advisors compiled by CLS Investments, LLC, revealed that “most expect the sale of their businesses to fund most of their retirement, with 41% saying the sale of their business will be between one quarter to one half of their retirement assets, and another 14% expecting a sale to make up half of all of their retirement assets.” Many advisors, due to a lack of their own planning, are hoping to win the equivalent of the lottery to fund their retirement. Why should anyone take that bet? While we would all like to win the lottery in our lifetimes, we know that very few do. We find it curious that so many financial advisors base their own retirement plan on something equally unlikely.

We have been blessed to be mentored by many who preached through word and deed the value of strong fundamentals. These foundations form the basis of being a serious, conscientious fiduciary agent to our clients. We don’t create, update, and communicate our succession plan to our clients because we have to; there are no current regulations protecting investors from advisers who don’t plan for succession or their demise.

We do it because it’s the right thing to do.


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Securities and investment advisory services offered through Steward Partners Investment Solutions, LLC, registered broker/dealer, member FINRA/SIPC, and SEC registered investment adviser. Investment Advisory Services may also be offered through Steward Partners Investment Advisory, LLC, an SEC registered investment adviser. Steward Partners Investment Solutions, LLC, Steward Partners Investment Advisory, LLC, and Steward Partners Global Advisory, LLC are affiliates and separately operated. The Sedoric Group is a team at Steward Partners.
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