Asking, "When are you retiring?" is almost the same as telling someone, "You're getting pretty old; time to hang things up already."

When other advisors ask this question, it may be for another reason: They are interested in the retiring brokers' books of business.

They want to buy them. They want to inherit them. They want to have the books handed to them.

Even if your retirement isn't near, it's important to have a plan. It's like writing a will; you don't really need it today, but when you do need it and you don't have one, things are not going to end up the way you want them to.

This past year, I heard of a longtime advisor who died unexpectedly. The advisor worked loosely with an in-law, but it wasn't an official partnership. Without partnership documentation approved by the firm, the book ended up distributed to the branch.

Years of hard work and relationships that had been developed and were poised for a legacy were lost. If a plan had been in place, this legacy would have been protected.

Even the onlookers at that branch who stood to benefit were disturbed by what happened.

Advisors at outside firms who heard about this incident were appalled. If there is any redeeming lesson to come out of this situation, it is to protect your legacy by having a plan. This is not unlike the kind of advice an advisor would impart to a client.

I've had more than one advisor tell me, "If you know of someone who wants to retire, I want to buy their book."

Unfortunately, there's not a Craigslist for selling a book of business, or this would be a very easy prospect.


Picking up a book of business is not as casual a transaction as some would-be buyers seem to envision.

Even though the buyer is not going to partner with this other advisor for life, he or she is going to partner with the people in the book.  Therefore, it's not as easy as making a valuation and signing a check if you want the book to transition.

There does have to be some kind of a match. A transactional book may have too much attrition when combining with a fee-based book.

An advisor with a million-dollar minimum limit is going to be unhappy with a book with too many smaller accounts. As with landing new clients, the best way to find these books is to get out there and meet with people.

That way, an advisor can develop a relationship that makes sense for both parties.

Firms also want to buy retiring books of business. For some advisors nearing retirement, this also makes a lot of sense because an advisor can be paid to move to a new firm and then be paid a second time if he or she later sells the book to another advisor.

It's the ultimate double dip. So why aren't more advisors doing this?


Fear is a part of it. I have worked with advisors who have more than 20 years of experience at their firms, and for many the prospect of change is terrifying.

I know of one financial advisor who is willing to settle for the smaller amount that he would receive by retiring at his own firm, because retiring there is much less of a headache than moving somewhere else.

He was convinced that, in this case, the new firm could have been a better fit in the long run. But the excuse was, "I'm too old and don't have the energy to change now."

Firms understand the temptation and, accordingly, many have changed their internal retirement packages in ways that are likely to keep advisors and their assets in-house.

If an advisor decides that an end-of-career move makes sense, this process will take some work. Most likely, the best-laid plans won't enable the advisor to retire immediately.

In such cases, a gradual phase-out will make the most sense in order to keep the integrity of the book intact.

This could mean months or even a few years. If another advisor is buying the book, the seller will want to make sure his clients have a seamless transition.

The whole point is to assure the advisor's clients that they will be well taken care of and that this is why the advisor is making the switch at the twilight of his or her career.

Done correctly, there is value for the buyer, the seller and the client.


Another obvious way to prepare for a smooth transition is to have junior advisors go into a partnership with a more senior professional.

In fact, most firms are encouraging, and in some cases requiring, teaming with senior advisors.

By teaming with a senior colleague, the junior advisor has the ability to learn and survive in the business while the potential succession plan is taking shape.

The most important advice for the younger partner is to prove your own value to the team. Seasoned advisors often tell me that they want a junior partner who is already a rising star, someone who could make it on his or her own but could also benefit from a team relationship.

Sometimes, unfortunate situations occur when junior advisors are part of a partnership without a contractual agreement covering what will happen when the senior partner retires.

It's possible that they may find themselves out of luck. No one is going to hand someone his or her book for nothing; it has to be earned.

On the other hand, I've also spoken to junior partners who have poured their heart and soul into the business, only to get the dregs — unproductive assets — and be strung along with the promise of inheriting a book that never materializes.

Prudent advisors eventually cut their losses and split, possibly even taking some of the book they were working on in the relationship.


In order for a partnership agreement to work, the parties need to agree upon fair value for the contributions of each of them.

It's important to get the relationship and expectations in writing, along with developing a plan of execution and responsibilities.

The discussion of what happens to an advisor's book is parallel to the conversations advisors should be having with their clients: Prepare for your future and the unexpected.

No advisor plans to die, get sick or have other family obligations that take them away from their business. But, as their clients must plan by drafting wills and financial plans, advisors must also be ready for any potential life changes.

In any career, there are always goals and then future plans. Think about your one-year, five-year and 10-year plan as well as goals, and put ideas in place to execute those plans to the best of your ability.

There are a variety of opportunities to make smart decisions that can get you out of the business or keep you in it for as long as you want. 

Elizabeth McCourt is a contributing writer for On Wall Street and senior vice president at Renaissance Unlimited, a financial advisor recruiting firm in Southampton, N.Y.

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