I also love seeing a light bulb go off in people’s heads when I ask them this same question.
Financial advisors, as a community, are responsible for helping people retire securely and comfortably. We spend time asking the right questions and providing sound advice in the hopes that our clients can achieve their financial goals. Retirement is often the client’s top goal.
However, as a prospect or a client of a financial advisor, you should occasionally consider turning the tables on your financial advisor. You should be asking them about their retirement plan. Why, you may ask? To protect your own long-term interest!
You want to be sure that your financial advisor has implemented a succession plan that considers your long-term needs as a client. There is a good chance that you will need an advisor long after you retire. However, if your current advisor is close to you in age, then it’s unlikely that they’ll be your long-term solution. This situation begs the question: who is going to take care of your account when your advisor retires? He or she should have a clearly defined succession plan that addresses your long-term need for a financial advisor.
As you work with your current financial advisor (or shop for a new one), you should ask yourself the following questions:
Who is sitting across from me right now? How old are they? What is their retirement plan? Are they working as hard for me as they used to? Do I know my financial advisor’s successor?
Why You Need to Ask These Questions?
The financial advisor community is rapidly aging. A recent article noted that the average age of financial advisors is 50.9 (with 43% of financial advisors over age 55). What can we learn from this statistic? Logic would suggest that, based on the average advisor’s age, many advisors will likely be actively pursuing their retirement in the near future.
As a client of a financial advisor, it would be unfortunate if your advisor retired at the same time as you. In the case of this ill-timed coincidence, you will be forced to seek out a new advisor at one of the most critical points in your financial plan – retirement.
A different, but equally concerning, outcome would be working with an aging advisor who continues to act as your financial advisor in “semi-retirement.” Good financial advising requires a steady and sustained commitment to education and improvement. It is difficult to believe that an advisor in semi-retirement will be as sharp as they were in their prime (see every professional athlete ever!).
As a Client, What Should I Look For?
How do you know that your advisor, regardless of age, is looking out for your best interest in the long term? Easy…just ask.
Directly ask your financial advisor what is going to happen to your account if they retire. Also, ask them when they plan to retire. Your advisor should be able to answer these questions easily, and you aren’t overstepping your bounds as a client by asking them.
If your advisor works in a team-based environment, then you may be able to rest a bit easier. In this situation, you have probably already met and actively worked with someone who can assume your account with little to no interruption. This is why a team-based environment is what you should be seeking.
If your advisor works independently, the answers to these questions become less clear. It’s important to carefully consider your advisor’s solution to the succession problem and explore your alternatives, if necessary.
Should I Leave Just Because They Are Older?
No, absolutely not. You should not leave your current financial advisor simply because of their advancing age.
You should, however, consider working with a new team-based advisor if you are not comfortable with your advisor’s succession planning. You should also consider leaving your current advisor if you feel in your gut that he or she has slowed down and isn’t working as hard as they used to.
At the end of the day, it’s your money; it’s your investments, your retirement, and your financial stability. You need to make the decision that is best for you and your family, taking into account both the short- and the long-term implications of your choice.