Succession planning drops as NextGen readiness lags

Succession planning has dropped significantly inside RIA firms, according to DeVoe & Company's 2024 Talent Management Report. The study names NextGen readiness pressure and evolving recruitment-and-retention strategies among the industry's most pressing human-capital issues.

DeVoe's recommended fixes are direct: become an employer of choice, hire proactively, and build a well-constructed compensation plan. The report frames those items as the levers that improve engagement and retention, placing them in front of firms that want to hold onto the talent they already have.

Read as a set, the list is not a menu of perks; it is a staffing pipeline. Employer reputation feeds hiring; hiring feeds the bench; compensation keeps the bench tuned. Succession planning, in this telling, is the output of the other three, not a standalone binder item. A firm that is a good employer, hires ahead of need, and pays the next generation as an investment is a firm with a succession plan that actually works.

The report's finding that succession planning is down while NextGen readiness is under pressure suggests the industry has it backwards. Firms that wait until a founder sets a retirement date to develop successors may find the talent already gone and the firm's eventual value harder to defend. Firms that run all three levers together will have options when founders leave; those that keep succession in the exit-planning folder will be negotiating from a thin bench. The compensation plan is the glue: it tells a promising advisor that the firm is a place to build a career, not just a job.

The stakes go beyond culture. A bench of developed successors is what lets an RIA outlive its founders; without one, continuity rests on a single generation. That is why the drop in succession planning is more than a personnel-data point — it is a value issue. For the owner plotting an exit, that makes the staffing calendar the strategic calendar.