Kiplinger: Your Financial Adviser Wants to Retire Too

When you hire a financial adviser, it’s common to work with someone your own age. So when you’re ready to retire, your adviser might be, too — right when you need the person most.

As it happens, the wealth management industry is about to face a wave of retirements. The average age of financial advisers today is about 55, with 20% of industry professionals currently 65 or older, according to a 2019 study from J.D. Power.

Whether your adviser is nearing retirement or not, you’ll want a succession plan in place before you need it. Ideally, your adviser should already have one, and if you’re unsure, ask.

Succession planning is a concern for all advisers, not just those nearing retirement.

Even though Luke Chapman, president of SFS Wealth Management in New Castle, Del., is only in his 30s, he intentionally built a team with other advisers.

“I could just as easily be hit by a bus,” he says. “That’s why it’s so important that my clients have relationships with at least one, if not two, other advisers in our practice.”

If your adviser’s succession plan includes other advisers, meet them and learn about their background. “Do they have the same qualifications, the same specialties? Do you trust them as much? Make sure you aren’t just getting passed off to your adviser’s son, the ‘heir apparent,’ who only got his license last week,” warns Chapman.

Not every departure is planned. A sudden illness, family emergencies and even death can leave you in a bind. Kevin Smith, a financial planner in York, Penn., remembers one such situation: “We had a couple who had been working with their adviser for decades. He handled their taxes as well as their investments. When he passed away, they had no idea where their money was. We spent three hours with them just to figure out what was going on.”

So what should you do if you discover that your adviser has moved on? “Don’t panic but don’t delay finding another relationship,” says Chapman.

Organizations like the CFP Board and the Financial Planners Association have search engines for finding advisers locally.

If your adviser worked at a firm with other planners, you could request another adviser there. In fact, you may already be assigned to someone else. This can be convenient because you won’t have to move your accounts, but it’s not a great sign that the firm didn’t have the forethought to build this relationship sooner.

If you don’t feel an immediate connection with that person, request interviews with other advisers at the same firm, and don’t feel obligated to stay. “No one firm or company owns your business,” says Chapman.

Working on a succession plan now with your current adviser means you won’t need to scramble for a replacement later.