Financial adviser paths to succession: a holistic approach

Updated on 9 September 2025 | 3 minute read | Brie Williams, Global Head of Advisory Solutions and Wealth Intelligence, State Street Investment Management

Succession planning is smart business for any advice practice
Options include internal succession, sales, mergers, or a combination
An intentional yet flexible approach is essential

Many financial advisers are seeing the benefits of privately owned financial advice practices. It can be much easier to build a client-centric approach in a smaller practice than a large one.

The past 12 months has seen a growing trend towards these small private practices (1-10 licensees). They now make up nearly a third of all adviser practices.¹

But advisers who have dedicated their careers to their clients and building strong advice practices cannot work forever. They’ll eventually want to retire.

It’s natural for advisers to feel nervous about this transition. After all, they’ve spent so long building up their brand. It’s also normal to be nervous about stopping work sooner than you’d planned.

The good news is you can increase the likelihood of a successful transition by being strategic. Creating a well-crafted continuity and succession plan is key.

Your succession plan can be a powerful tool to help:

maximise the value of your business.
support client retention.
minimise the risk of partnership misalignment.
reduce friction between potential buyers and sellers.

It's important to start laying the groundwork for your transition as soon as possible.

Succession planning is smart business

Clarity and discipline in succession planning are essential. This involves considering vision, strategy, and tactics. An understanding of opportunity costs will also assist in more profitable decision-making.

A comprehensive plan helps address practice viability from the following perspectives:

Fiduciary: safeguarding clients’ best interests.
Business owner: protecting enterprise value, including client and team retention.
Client experience advocate: ensuring that unforeseen events or an adviser’s retirement won’t negatively affect clients.

Evaluating business transition models

There are numerous options available for transitioning a practice, including:

internal succession
a direct sale
merger or acquisition; or
combination of the above.

Different transition options offer varying degrees of opportunity and control.

Internal succession

This is an organic growth strategy. It involves transitioning equity to an individual or group within your practice.

Pros

Good continuity for clients and your team.
Advisory owner can retire or maintain a limited role.

Cons

Need for hiring and training if best leader for the business doesn’t exist internally.
Internal buyers may require longer-term financing or earn-out clauses.

Direct sale

This is the direct sale of the business to a buyer. They could be another adviser, advisory team, or a financial institution. Client relationships are usually part of the sale.

Pros

Provides more immediate liquidity.
Common deal terms include cash down payment with the balance financed.

Cons

Performance and retention criteria may be part of the agreement.
High potential for disruption of clients and team.

Merger and acquisition

This is an inorganic growth strategy which can expand the business. It’s designed to boost market share and scale.

Pros

Access to new markets, expanded practice expertise, and economies of scale. 
Medium to high degree of continuity for clients and team.

Cons

Finding the right business match can be challenging.
Integration may be complex.

5 guidelines to shape your transition strategy

A successful transition plan needs to consider several factors and potential trade-offs. A proactive approach can help minimise client experience disruptions when unplanned scenarios arise. It will also keep the timeline on track.

Here are 5 guidelines to consider

Budget enough time for a transition

Timelines can vary greatly depending on the path you pursue and what elements you have control over. It could take as little as one year or up to 10.

Shorter timelines impose constraints and entail risks that longer timelines may not. The more time there is to build and evolve your plan, the better.
Understand the drivers of practice valuation and address weaknesses early

There are many established methods for valuing an advice practice business.

The revenue multiple should be a starting point for assessing the value of a business. You can then adjust to reflect business characteristics. These could include assets under management, revenue mix, and client age and tenure.
Focus on key decision factors

Define a clear vision for client experience and practice culture. Set expectations and outline roles to ensure success.

Explore integrating new technologies, pricing strategies, and achieving benefits like economies of scale.
Build your human capital

The advice business thrives on relationships and service and your business's people plan is crucial.

Attracting, retaining, and developing talent is vital for long-term success. Don't forget to consider how you can keep your good employees on board.
Be proactive with clients
Transparency is essential for client peace of mind during any transition. Consider early collaboration with the eventual successor and provide updates to clients. This can ensure continuity in service, investment management, and product selection.
It also encourages a proactive approach for client retention as your business evolves.

Looking to the future

Continuity and succession planning often extend beyond retirement. But you can protect your business through careful planning for the future.

The best transitions happen when you can establish and maintain a robust plan for continuity and succession. This will keep all clients and staff, and most importantly you happy.

Jumpstart and enhance your succession planning

For more succession insights, including risk mitigation strategies and advice to conduct a self-assessment, download 'Succession, scale, capabilities, or a combination? Evaluating succession opportunities'.

Download now