Planning is crucial for a financial adviser who wants to retire from a business they have built up.
Whether this means making a full exit from the firm or stepping back gradually, the transition to retirement presents opportunities for both the adviser who wants to leave and any firm looking to expand its client base by taking over the business.
Over three-quarters, or 76%, of financial advisers plan to retire from the industry over the next decade, according to research carried out by data group Opinium in 2023. Meanwhile, close to a third, or 31%, expect to retire within two to five years.
Smooth transition
A smooth transition requires strategic and financial planning from those stepping back as well as those stepping up.
Preparing for a sale means exploring flexible retirement options and forming strategic partnerships with prospective buyers
For advisers looking to completely retire from the industry, good preparation of the business for sale is essential. This includes streamlining operations to ensure business processes are documented and easily transferable. Financial records should be up to date and easily understood.
Also, communicating openly with staff and clients about retirement plans can help to ensure loyalty and retain talent. This can prove beneficial during the sale of a business as a strong team and client book are valuable assets.
Gaining a retiring adviser’s client base can provide an immediate revenue boost and market presence
For advisers looking to step back a little before their retirement, a phased approach that includes selling a portion of the business, or sharing ownership with a successor, can pave the way for a steady exit from the industry when the time comes.
Mentoring role
Some advisers may want to move to a consultancy or mentoring role, enabling them to stay in the business but let go of day-to-day operations.
A partial retirement also lets the acquiring firm gain access to the experience and knowledge of the outgoing adviser, which can contribute to a smoother transition.
A smooth transition requires strategic and financial planning from those stepping back as well as those stepping up
Forging a close relationship with the retiree can help acquiring firms to build continuity and stability during the handover. This is particularly important because gaining a retiring adviser’s client base can provide an immediate revenue boost and market presence.
Minimal disruption
Although the road to retirement can be daunting and complex, preparation is key to helping advisers to achieve their exit goals.
Some advisers may want to move to a consultancy or mentoring role
Preparing for a sale means exploring flexible retirement options and forming strategic partnerships with prospective buyers. This approach can also ensure acquiring firms expand their business with minimal disruption, helping to strengthen their place in the market by taking advantage of the departing adviser’s expertise.
This will boost the acquiring firm’s growth while causing only a slight upheaval when the day finally arrives for the retiring adviser to walk away from the industry.
This article featured in the April 2025 edition of Mortgage Strategy.
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