Gaps in succession planning create a talent flight risk: 1 in 3 potential successors say they would consider leaving without a clear succession timeline
Kestra Financial (Kestra) and Bluespring Wealth Partners (Bluespring), companies within the Kestra Holdings ecosystem – which offers industry-leading wealth management platforms for independent wealth management professionals – today announced the release of its first-ever proprietary industry survey, Bridging the Gap: Succession Misalignment Between G1 and G2 Advisors, conducted by independent research firm 8 Acre Perspective.
The new survey on advisor succession planning captures the opinions of advisors in the U.S. who are affiliated with a broad range of independent broker-dealers and RIAs and reveals a significant disconnect in execution between G1 advisors, who are firm owners planning to retire, and G2 advisors, who have been identified as successors or potential successors for owners in their current practice. Despite shared aspirations when it comes to leadership transition planning, this misalignment creates a divide.
Many owners eyeing succession feel confident about their plans, but just 6 percent of those planning to retire within 10 years have a fully documented succession plan. Meanwhile, many intended successors feel undervalued and unprepared—some even on the verge of walking away. In an industry facing a scarcity of next-generation talent, that’s a risk no firm can afford.
Top findings include:
- G1s want to retire, but over 50 percent struggle to relinquish control. Additionally, more than four in ten fear their clients will not be taken care of as well if they leave.
- One in three potential successors say they would consider leaving without a clear succession timeline. The longer G1s wait, the more they risk. Delays can put owners significantly off course with risks including losing scarce G2 talent.
- G2s want tangible incentives, yet fewer than half (41 percent) of G1s nearing retirement have transferred any equity to successors. One in four G2s would consider leaving in the absence of being given equity or a timeline for receiving equity.
- Only 35 percent of G2s feel fully prepared to assume leadership, pointing to the need for additional leadership development and training. The top two areas G2s would like to take on more leadership responsibilities are strategic planning (49 percent) and business financials (47 percent)—the very skills they need to step into ownership confidently.
"Succession planning is often viewed as tomorrow’s challenge, but our data shows that delaying planning has a negative impact on firms today,” said John Amore, President of Kestra Financial. “This research aims to equip advisors with a clear path to bridging the generational divide and future-proofing their businesses. Firms that embrace this approach will thrive through transition, rather than just getting through it."
“Not paying attention to succession planning or delaying a transition can expose any business to both talent and client loss, and ultimately it can lead to enterprise value erosion,” added Pradeep Jayaraman, President of Bluespring. “There are multiple approaches to succession planning: naming an internal successor, bringing in an outside hire, or pursuing a merger or a sale. Determining the best path all comes down to aligning the unique goals of each business owner and their potential successor to ensure a successful transition.”
Effective succession planning solutions support both the owners transitioning their business to the next generation and the successors preparing to take the reins, ultimately ensuring consistency of strong client care. Through Kestra, Bluespring, and the additional firms within the Kestra Holdings ecosystem, the wealth management and RIA industry can close the gap—and build a more sustainable, advisor-led future.
Commissioned by Kestra and Bluespring and conducted by independent research firm 8 Acre Perspective, this survey was conducted with both G1 and G2 advisors across a broad range of independent broker-dealers and RIAs. All participants are with firms that have $750K or more in revenue, at least half of which is generated from individual retail investors.
For more insights and to view the full report, visit: https://partner.kestrafinancial.com/succession-report/
About Kestra Financial
Kestra Financial is a leading independent wealth management platform headquartered in Austin, Texas. A division of Kestra Holdings and established in 1997, the firm empowers independent financial professionals and wealth management firms – including traditional and hybrid RIAs – by offering personalized support, integrated business management technology, and access to a collaborative community of like-minded financial professionals. With a culture rich in reinvention, Kestra Financial has developed integrated business management technology that, combined with its personalized consulting services, offers exceptional scale and efficiency.
Overseeing $142 billion in assets under advisement (AUA), Kestra Financial supports more than 1,300 producing financial professionals and is committed to delivering superior service that enables their growth, success, and ability to best support their own clients.
The Kestra Financial division includes Kestra Private Wealth Services, LLC (Kestra PWS), Kestra Advisory Services, LLC (Kestra AS) and Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Securities offered through registered representatives of Kestra IS. Investment advisory services offered through appropriately licensed representatives of Kestra AS or Kestra PWS. Except for the referenced Kestra companies, Kestra IS, Kestra AS, or Kestra PWS are not affiliated with other entities referenced in this publication.
For more information about Kestra Financial, please visit https://www.kestrafinancial.com/.
About Bluespring Wealth Partners, LLC
Through a highly customized and people-centric approach, Bluespring is dedicated to the acquisition and support of quality wealth management firms. In partnering with experienced wealth advisors and their teams, Bluespring looks to perpetuate and enhance the value that they bring their clients, providing continuity and new opportunities in the process. Bluespring was established with the express purpose of helping entrepreneurs take their business to the next level of growth through successor training and incentivization, consulting and operational resources, flexible ownership arrangements, and institutional capital support. By focusing on partnership as the driver of success, Bluespring empowers wealth management firm owners to elevate their business without sacrificing their entrepreneurial spirit, founding principles, and long-term vision. https://www.bluespringwealth.com/advisor
About Kestra Holdings
Kestra Holdings offers industry-leading wealth management platforms for independent wealth management professionals nationwide. With an innovative culture that celebrates independence, the company seeks to redefine the future of the advisory industry through superior service, cutting-edge technology, and preeminent resources that every financial professional needs to succeed in the market now and in the years to come. Kestra Holdings companies support independent financial professionals across the country in delivering comprehensive securities, trust, and investment advisory services to their clients. Kestra Holdings is the direct or indirect parent company of Arden Trust Company (www.ardentrust.com), Comprehensive Brokerage Services (CBS) which operates within the Kestra Holdings ecosystem as Kestra Insurance Planning (https://www.kestrainsuranceplanning.com), Bluespring Wealth Partners, LLC (www.bluespringwealth.com; including its investment adviser and wealth management firm subsidiaries), Kestra Investment Services, LLC, member FINRA/SIPC, as well as Kestra Investment Management, LLC (www.kestraim.com), Kestra Advisory Services, LLC (www.kestrafinancial.com), Kestra Private Wealth Services, LLC (www.kestrafinancial.com/private-wealth-services), and Kestra Institutional Services, LLC, all federally registered investment advisers.
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