Advisors thinking about retiring and relinquishing control of their practices can find themselves paralyzed with concern for the future of the business they’ve dedicated so much of their lives to building and nurturing. Although it’s natural to have concerns about any type of change—especially one as life-changing as retirement—that shouldn’t stop you from making plans for your succession. Following are 10 essential steps for retiring advisors struggling with identifying when and how to let go and hand over the keys to the next generation.


1) Envision Your Retirement

Spend some time dreaming about your ideal retirement. For many advisors, realizing their next goals gives them a compelling reason to retire, and they often find that the willingness to give up control soon follows. For example, you may want to:

  • Enjoy yourself while you're still in great health
  • Start a new business
  • Explore a different climate, geography, or culture
  • Pursue a passion, sport, or hobby
  • Spend more time with loved ones


2) Let Go of Your Ego

You don't have to be a multimillion-dollar producer for your identity to be wrapped up in your practice, but this is a major roadblock in succession planning for advisors. Take a step back and view your practice as you would any other business. Focus on the satisfaction and sense of accomplishment that will come with passing on your firm's legacy or hearing how happy your former clients are with the new advisor. Who knows? It might even surpass the satisfaction you currently feel in running the day-to-day operations of the business.

3) Don't Look for an Exact Replica of Yourself

I often hear advisors say, "I would retire if only I could find someone like myself to take over my practice." This search is futile. No one is exactly like you. Instead, determine which qualities are most important to you—and search for a successor who fits that bill. If you need some guidance, Commonwealth Financial Network’s Practice Management team has developed a checklist to help you find and prepare the ideal successor.

4) Get Feedback from Your A+ Clients

The reasons you think your best clients have been with you for so long may not be correct. You may believe that they value your investment performance above all else, but, in reality, they consider your commitment to service and accessibility indispensable. Find out, preferably early on in the process, what your clients appreciate most about you and you'll be better positioned to choose the right successor.

5) Seek Out Sound Advice

To avoid common succession pitfalls, it's critical to align yourself with sources of independent, objective advice. Assemble a team of accountants, legal experts, and other strategic alliances who have experience with business transitions.

6) Assess Your Finances

You’re in the business of calming clients' fears about having enough money to retire. Now that you're in their shoes, you may be just as anxious. Instead of worrying, use the same analytic process that you do with them to calculate how far your nest egg will go.

You may find that you can't afford not to retire. Our constantly changing industry requires an intense commitment from advisors. It can be riskier to shift to a part-time or semi-retired role in an advisory practice, as you may lose enterprise value in the process. Putting your practice in the hands of an energetic and focused buyer may provide more economic value to you in the long run.

7) Engage Stakeholders

Succession planning for financial advisors requires input and suggestions from all stakeholders. Be sure to include your employees and partners in your plans. With their feedback and collaboration, you're more likely to make smart planning decisions—and enjoy a more successful transition overall.

8) Set Milestones

To achieve your goal of retirement, set several milestones for yourself. These may include discussing specific issues with your successor, deciding your retirement date, or developing a spending plan for your first years in retirement. Having a well-defined plan will help you stay focused on moving forward, step by step.

9) Give Yourself Enough Time

It's wise to begin succession planning three to five years before you want to retire. Succession is a transition, so don't feel that it needs to happen all at once.

10) Begin Organizing Your Business

Next, it's time to tackle the logistical side of retirement and succession planning—preparing your business, successor, and clients, as well as executing the deal itself. Begin by organizing your business's important documents and determining the best form of succession for you.

Maria Considine King is vice president, practice management, at Commonwealth Financial Network®, member FINRA/SIPC, an independent broker/dealer–RIA.