When the Old Horses Run

Journal of Financial Planning: December 2015


Richard P. Rojeck, CFP®, is the 2015 Chair of CFP Board’s Board of Directors.

You’re undoubtedly aware of the aging adviser workforce. The average age of a CFP® professional is 53. In fact, there are more CFP® professionals over the age of 70 than under the age of 30. Most readers of this column are showing the wrinkles, graying locks, and receding hairlines of advancing age. While clients no doubt benefit from the wisdom gained through our advanc​ing years, the graying of the adviser workforce begs the question: what will become of our practices and the clients we serve?

Some of you may have already undertaken to create a practice succession plan—a plan to sell your practice in the event of a disability, death and, ultimately, retirement. Most of us, I’m afraid, have not. FP Transitions, a firm that specializes in advisory firm succession, estimates that only 5 percent of advisers have a written plan. Since planners are supposed to plan, shame on us!

For those of you who are solo practitioners, you should have an agreement with another professional, in the case of your disability, to step in and serve your clients until your return, and to purchase your practice, should you not. The agreement should also address a sale upon your death.

If you’re in an ensemble practice, the choice of a successor is more obvious. And the document should also address considerations typical of professional practices (for example, loss of professional license or certification, personal bankruptcy, etc.).

Why Advisers Struggle with Succession

In my day job, I frequently consult with advisers regarding practice succession. And when it comes to the retirement scenario, my experience has been that advisers struggle with it the most. The reasons are at least threefold. First, we baby boomers cling to the notion of eternal youth (ever observe that everyone else at the rock concert is aging except you?). Planning for a retirement exit is an admission of our advancing age. Secondly, it’s a daunting task and you actually have a practice to run. Finally, since practices typically sell at a multiple of 2.5 to 3 times recurring revenue, many conclude that if they kept their practice they’d earn that much back in as many years. And they’re not really working that hard anyway.

This simplistic analysis misses the following: productivity declines as advisers age, resulting in a declining sale price. Further, client service quality tends to decline as an adviser and his or her team ages. And finally, you may not want to “die with your boots on.”

My observation has been that most advisers prefer to “grow their own” successor. Experts commonly recommend that this process be started approximately 10 years before the date you plan to have “retired” (acknowledging that you might want to continue seeing clients, on a part-time basis, but without management duties). So, if you are already age 60 or older and you’re without a strategy, it’s time to get busy and establish one.

This is where FPA helps its members. The best programming I ever attended on this subject was at a full-day pre-conference workshop at the FPA Annual Conference in San Diego in 2011. Four different real-life practice transitions were discussed by the principals involved. The session revealed both the art and science of planning for and executing a retirement transition.

An Example of a Successful Transition

One of the most successful transition plans I have observed is currently underway at my own broker-dealer. Dave, a CFP® professional in his mid-50s with a very successful practice, knew that within a 10-year period he would want to begin to slow down, though by no means retire altogether. He also was very proud of his “community-based” practice, as he is fond of describing it, and wanted it to continue to serve existing as well as future clients.

Dave’s solution was to recruit a bright young fellow by the name of Eric into his practice. Eric’s job was to learn the business under Dave’s coaching, help Dave serve existing clients, and occasionally introduce Dave to some well-targeted, high net-worth business owner opportunities. Eric was required to get professionally credentialed, including enrolling in a CFP Board registered master’s program.

Two years later, Eric had completed his MBA (CFP Board has 195 university bachelors, masters, and Ph.D. registered programs across the country), passed his CFP® certification exam, and was an integral part of Dave’s practice. With the maturing relationship, they entered into a buy-sell agreement (properly insurance funded, of course). Eric has a relationship with virtually all the clients now, and in fact, many no longer regularly see Dave. Within a few years, a transfer of ownership will begin to Dave’s heir apparent. Incidentally, Eric now teaches CFP® courses at a CFP Board-approved university program.

But Dave was not done yet. He hired Jessica, who upon receipt of her bachelor’s degree from another university with a CFP Board registered program, had passed her CFP® exam. She is now satisfying her practice experience supporting the planning function in Dave’s practice. Finally, there’s Alexandra, Dave’s daughter. While working on her MBA, she’s working part-time in Dave’s practice.

A Growth Strategy

There’s an expression, “The old horses run a little faster when the young ones are in the corral.” Surrounded by all this youthful exuberance, Dave’s practice has grown at an accelerated pace. What started out as a succession and exit strategy has become a growth strategy. In my experience, this result is not unique.

There’s a role for both FPA, as the professional association for CFP® practitioners, and for CFP Board as the standards-setting and certification body. FPA will continue to provide great programming in practice management, including practice succession planning. And CFP Board will continue to develop registered programs, especially those in the leading schools of business. CFP Board can also help connect, through our newly launched Career Center (www.CFP.net/Career-Center), firms and business owners with students seeking internships, with candidates for certification (those who have passed the exam and need to fulfill their experience requirement), and with experienced CFP® professionals looking to join a new firm.

Working together, FPA and CFP Board can help ensure continuity of client service, support successful and profitable practice transition, and enhance career paths for a generation of new CFP® professionals. That’s a win-win for everyone, and it’s an important step forward in the growth of our profession. 


Wherever You Are in Your Career, FPA Is Here to Help

Looking for guidance on your career? As an FPA member, you have access to a variety of career-related resources through OneFPA.org and local chapters, including continuing education, articles, communities, and more to assist at every phase of your career (OneFPA.org/BusinessSuccess/NewToTheProfession/Pages/FPA-Career-Development.aspx​).

FPA Job Board

Advance your financial planning career and discover new job opportunities by searching for jobs and posting your resume for free on the FPA Job Board (Careers.OneFPA.org).

Job seekers:

  • Showcase your skills and work experience to prospective employers
  • Find everything from internships to senior-level positions
  • Create a job agent to automatically send you openings that fit your search criteria 


  • Target your recruiting and reach qualified candidates quickly and easily
  • Access educational articles and resources to help successfully fill job openings

FPA MentorMatch

If you need guidance and support to advance your career or you would like to give back to the profession, look to FPA MentorMatch (Connect.OneFPA.org/Participate/MentorMatch/AboutMentorMatch​).

FPA Residency

Newer planners experience true immersion learning at FPA Residency, where they explore real-life planning scenarios with some of the most prominent planners in the country as teachers and mentors (OneFPA.org/ProfessionalDevelopment/Residency/Pages/Default.aspx​).


Are you a young planner just getting started in this profession? Join the FPA NexGen community for planners age 36 and younger (OneFPA.org/Community/NexGen​) and explore issues of common interest to those just starting out in their careers.

Are you a career-changer or new to the profession? Join the 2ndActGen and New to Profession communities on FPA Connect (Connect.OneFPA.org).

FPA Connect is also the virtual home of FPA Knowledge Circles. Knowledge Circles are gathering places for like-minded FPA members to discuss and share best practices and innovations on specific subjects including retirement planning, estate planning, and tax planning (Connect.OneFPA.org/Knowledge-Circles).


Did You Know? About 95 percent of what we learn is learned informally through conversation with peers. FPA Connect and FPA Knowledge Circles create the largest peer-to-peer venue for informal learning among CFP® professionals.

Succession Planning