About half of RIAs have a succession plan in place that outlines who will take over the firm.
Moreover, of those firms who have procedures in place, 37 reported said their successors are “extremely prepared” to take the reins and lead the company into the future, according to latest Independent Advisor Outlook Study, released Wednesday by Charles Schwab at its annual IMPACT conference in Denver.
The current and next generation of advisors also tended to agree on how to run a firm more often than they disagreed, especially when it comes to things like education, relationship management and investment strategy. Perhaps unsurprisingly, the generations disagreed when it came to using technology, talent acquisition, and marketing/business development.
“It is not surprising that for some firms, current and future leaders have different perspectives driving their views on the business. Generational change is happening inside RIA firms - just as it is in the investing public - with members of the next generation beginning to move into leadership positions. Often current leaders are the pioneers, having established and built the firm, and future leaders are increasingly tasked with taking the reins and driving continued growth against a changing client and investing landscape,” said Bernie Clark, executive vice president and head of Schwab Advisor Services. “Regardless of perspective however, founding and next generation leaders must come together to tackle the important areas that will fuel their future growth.”
The study reflects the responses from 740 RIAs representing $243 billion in assets under management custodied with Schwab. The report also examined efforts made by RIAs to attract younger and more diverse advisors, as well as firms looking to ultimately sell their business.