Printer Friendly

Majority of RIAs lack succession plan.

A majority of independent RIAs know that their clients expect them to have a succession plan in place, yet most have not planned for the formal succession of their businesses, according to a survey of 500 RIAs released in June by TD Ameritrade Institutional.

The quarterly survey found that although the average age of RIAs is over 50, 57 percent did not have a formal succession plan and 88 percent did not have business valuation in place. Thirty-nine percent of those surveyed did have a formal succession plan, and 4 percent were developing one.

Nearly half of those with a plan in place expect to appoint a successor to take over their business, according to the survey; 18 percent are considering selling the practice and exiting the business or merging with another firm, and 29 percent not decided what type of succession option to implement.

Fifty-seven percent of those with a succession plan cited a desire to support the long-term viability of their firm as the reason; 52 percent said the main reason was satisfying client expectations that a succession plan is in place; 36 percent wanted to provide a smooth transition into retirement; another 36 percent said providing continuity for their employees was the reason; and 32 percent wanted to enhance the valuation of their firm.

[ILLUSTRATION OMITTED]

Asked how they would enhance their firms' valuations over the next year, 61 percent of respondents said they would build a wealthier book of business. Another 48 percent said would do so by implementing a marketing plan, 40 percent by improving operational efficiency and 38 percent by investing in technology. Twenty-eight percent look to improve firm valuation by improving staff skills, while 26 percent plan to do so by adding staff.

Michael S. Fischer (msf7@columbia.edu) is a New York-based financial writer and editor and a frequent contributor to WealthManagerWeb.com.
COPYRIGHT 2010 Summit Business Media
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2010 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:BROKER/DEALER PLAYBOOK
Publication:Boomer Market Advisor
Date:Jun 18, 2010
Words:311
Previous Article:The retirement question is the answer.
Next Article:The latest 'wrap' on 401(k) guarantees: annuity-like insurance wrappers for 401(k)s are the talk of the industry. Is this emerging breed of lifetime...
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters