Emotional hangups stall advisors’ succession plans
Edward Jones survey finds 71% of advisors reluctant to tackle succession, 61% prefer trusted buyers and 42% have formal plans; nearly 60% of senior advisors expect handoffs within five years.
An Edward Jones survey conducted with Morning Consult finds emotional obstacles are slowing succession planning among financial advisors. The online poll of 233 advisors ran July 14–18 and asked about timing, planning and concerns when transferring a practice.
The survey defines senior advisors as those with at least 10 years of experience or who are within 10 years of retirement. Nearly 60% of those senior advisors said they expect to hand off their practices within the next five years, yet only 42% of all respondents reported having a fully documented, legally binding succession plan.
Respondents identified several top concerns. Seventy-one percent said they were reluctant to deal with the complexities of succession planning; 61% said they want successors they can trust; 27% listed worries about getting a fair valuation for the practice; and 25% said succession felt too distant to address now.
Edward Jones offers transition and integration managers to assist advisors moving a practice and promotes teaming arrangements that let junior advisors gain experience as potential successors. Jason Henderson, principal and head of financial advisor recruiting at Edward Jones, noted, “The numbers tell a story we hear from industry advisors every day: they know succession planning matters, but aren’t doing enough about it.”
Industry options for passing on a practice include internal succession, where junior partners or team members are developed over years; mergers that bring in teams who can assume leadership; firm-run sunset or buyout programs for employee advisors; and independent sales where advisors build equity to sell their practices.
Observers warn that informal or verbal agreements can leave firms exposed if an unexpected event occurs before plans are formalized. Written, legally binding succession documents are recommended to define ownership, compensation and continuity of client service.
The survey highlights a gap between planned exits and formal readiness: many senior advisors anticipate handing off practices soon, but a majority of all advisors have not completed formal succession plans.
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