Nearly a third of retiring advisors lack succession plans

Nearly a third of advisors expected to retire within a decade have no succession plan, WealthManagement.com reported from RIA Edge Austin.

Cerulli Research estimates roughly one-third of advisors will retire in that window, overseeing about $14.5 trillion.

Steward Partners' Jeff Gonyo put roughly $4 trillion of that pool "up for grabs" and said firms without a succession plan will see their value erode. "If you don't have that succession attached to it, if you're not growing into it, then that business value is going to continue to go lower and lower and lower," he said. The panel framed the stakes against an estimated $124 trillion passing to younger clients over 25 years.

The average RIA owner spends less than 1% of annual revenue on growth, Gonyo said, compared with 2.5% to 3.7% at top-decile firms. Another panelist estimated that only about 20% of firms they work with have a defined, funded growth strategy. "AI is not going to fix this," Gonyo said. "We need people."

For an owner approaching a sale, that funding gap is a valuation line item: a firm without succession and growth spending will fetch less from buyers.