Planning for internal RIA succession? Experts say it takes a decade

But planning to exit the business someday is typically much easier said than done for many financial advisors, who operate in a widely dispersed field of tens of thousands of RIAs and usually enjoy working with their clients much more than completing administrative tasks. If they aim to retire in the next decade with an internal succession that doesn’t involve selling the business to an RIA consolidator or another large wealth management firm, they may have already delayed their succession planning too long.

“You need to start early. You can’t be wanting to retire in five years and think that you’re going to start this a year before you retire,” said Dominique “Dom” Henderson, a planner who is the founder of Dallas-based RIA firm DJH Capital Management and the Jumpstart Coaching Lab, an advisor training and coaching firm. He recalled a presentation at an industry conference this year by an advisor whose firm has about $300 million or $400 million in client assets but two failed succession plans in the past.

“She had been trying at this for 15 years, so this is the reason that people hire consultants to help them with this,” Henderson added. “It’s a lot of moving pieces, so my advice to anyone is, start early.”