What’s the next step for you?
I started in the financial planning industry at the age of 22. It was not uncommon for me to hear phrases like “he’s a nice young man, but a little wet behind the ears”.
Now that I’m in my 30s, more and more clients are looking for younger financial advisers not out of choice, but out of necessity.
If you are a baby boomer, chances are your advisor has retired or is about to retire. According to various studies, the average age of financial advisers is between 51 and 55 years old, with 38% of them planning to retire within the next 10 years.
Among those surveyed, only 27% of advisors say they have a written succession plan in place. A succession plan is the process of choosing who can replace former leaders when they leave, retire or die.
What does this mean to you? This means that the person who brought you into your retirement years is unlikely to be the person who gets you through them.
These sobering numbers illustrate how important it is to you to work with a team of advisors. Working with a team can reduce advisor longevity risk and provide peace of mind knowing that your heirs can call on a familiar face to help you settle your estate.
I encourage you to seek out a registered investment advisor who acts as a trustee. As a trustee, these offices are required to provide advice in your best interest.
Usually these advisors have team members who specialize in different areas of financial planning such as: retirement income, social security, asset allocation, tax and insurance planning, etc.
The most important question you can ask your advisor is “What’s your transition plan?” If they don’t, it’s a red flag that your advisor hasn’t planned far enough into the future. There is no “one size fits all” answer to the question.
Some plans may include training junior advisors to scale up and lead the business, while others may include hiring an outside strategic partner. Either way, it’s not a conversation you should avoid.
This information should not be interpreted by a client or potential client as the provision of personalized investment advice. All investments and investment strategies have the potential for profit or loss, and there can be no assurance that the future performance of any specific investment or investment strategy, including those discussed in this document, will be profitable or will equal historical performance levels. Investment strategies such as asset allocation, diversification or rebalancing do not ensure or guarantee better performance and cannot eliminate the risk of investment losses. Any benchmark benchmark is not a prediction or projection of actual investment results and there can be no assurance that a target will be achieved. Kent Patrick works at Bush Wealth Management.