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Advisors in Transition

Need Succession Planning Guidance?

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Need Succession Planning Guidance?

Annually we report on our subscriber data to provide insights to advisors as they refine their firm’s succession and strategic growth plans. A completed RIA Match profile includes comprehensive information from up to 72 data points. This aggregated subscriber data offers insight into the trends and goals of over 3,600 advisors. In our latest RIA Match Infographic, we provide a snapshot view of the subscriber’s participation, trends, and goals. We hope you find useful.

Our Methodology
 

We examine the data of completed profiles to discern:

  • Who is using the site, the advisor’s affiliation (Independent RIA, IBD, Wirehouse, etc).
  • General attributes of their practices. NextGen, Early Solo, Mature Solo, Mature Ensemble and Market Dominator See definitions in footnote.
  • AUM, Goals and Age.
     

The Context
 

We compare our subscriber universe to the advisor industry at large to compare and contrast the similarities and differences.

According to Cerulli Associates, 37% of advisors will retire within the next 10 years and only 9% plan to sell their business. More than one third have no formal succession plan.

RIA Match Finding
 

  • RIAs and Early Ensembles are the most common subscriber types.
  • 70% of firms have an AUM of less than $100 million
  • Over 1/3 are buyers but identify additional goals like adding advisors
  • Nearly 2/3 of subscribers are between the ages of 30 and 50.
  • Most RIA Match subscribers are mid-career and want to grow.
  • While 58% of RIA Match subscribers have 10+ years of experience, only 12% of subscribers are over 55.
  • 37.5% Buyers, 14% mergers, 20% want to add advisors 12% want to join a firm.
  • Subscribers identify themselves as buyers at all AUM levels.
  • 30% of subscribers have AUM of $100 million or more.
  • 23% of subscribers have 0-4 years of experience.
  • 12% are in their 20s, 31% are in their 30s.
  • 5% are women
     

The Takeaways
 

For advisors to do what’s best for their clients and themselves, they need to consider the different paths available for growth. 

  • Be more than a buyer. — Subscribers overwhelmingly identify themselves as buyers and outnumber sellers nationally regardless of age and AUM and this is consistent at RIA Match with 37.5% of the subscribers as buyers and 1.7% as sellers.
     

These same buyer firms can become a seller themselves as the time constraints of seeking a succession plan force them to widen their options. The firms that feel the greatest pressure to implement a succession plan typically have partners of similar age who want to protect their investment in the firm and maintain a growth rate to secure their firm’s value. It’s this calculus that causes some advisors to consider selling which is contributing to the increase in industry consolidation. 

  • Invest in the future –The NextGen make up nearly ¼ of the subscribers, 43% of subscribers are in their 20s and 30s, 11.8% of subscribers want to join a firm providing a resource to owners who want to add younger advisors. The industry is anxious about the shortage of advisors yet we see there is a willing cohort wanting to join. A challenge for smaller practice owners it to view the NextGen salary as a long-term investment, not a cost.  Read about Chris, a $100M AUM firm who successfully adding Ryan, a NextGen advisor.
  • Consider a merger– Approximately 14% of subscribers want to merge. Consider merging with an existing advisor where he/she retains client ownership and you charge him a fee for plugging into your platform or services. Give the advisor an opportunity to have you as their contingency plan and ultimately as a succession plan. This is easier, cheaper and likely a more successful way to grow your AUM.Read about Bill who owns a $350M AUM firm and is growing his assets with mergers.
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