Displaying items by tag: advisors

Starting your own registered investment advisory (RIA) firm can be a rewarding move, especially amid a booming millennial client base and the $124 trillion wealth transfer underway. Advisors should begin by clarifying their personal and professional goals, then build a strong support team, including legal, compliance, tax, and marketing professionals, to ensure a smooth transition. 

It’s also essential to prioritize time wisely, balancing firm operations with client service and determining whether to outsource areas like investment management. Crafting an efficient tech stack is another foundational step, with core platforms for custody, CRM, portfolio management, and financial planning needed to streamline operations. 

Transitioning clients to the new firm must be handled carefully, ideally with legal guidance and a clear plan for targeting the ideal clientele. 

Finsum: With strategic planning and the right infrastructure, advisors can build scalable, client-centric RIAs ready to serve a changing generation of investors.

Only about 6% of advisors planning to retire within the next ten years have a fully documented succession plan in place. While most first‑generation (G1) advisors express confidence about their transition, many feel reluctant to relinquish control, with 58% admitting they struggle to hand over leadership functions.

 On the other hand, successors (G2 advisors) often report uncertainty about timelines and compensation, and roughly one in three say they would consider leaving if the succession path remains vague. 

To bridge the gap, the study identifies three pillars essential for successful transitions: transparency, training, and tangible, documented leadership plans. Equity incentives also matter: fewer than half of G1 advisors have transferred any ownership stake, which fuels G2 turnover risk when their compensation lacks clarity. 

Finsum: Ultimately, without structured alignment between retiring firm owners and their successors, firms face elevated risks of client attrition, fractured continuity, and erosion of enterprise value.

A coalition of top financial planning organizations is urging the Department of Labor to finalize its proposed Retirement Security Rule, which would require financial professionals to act in clients' best interests when giving retirement advice. 

In a joint letter to Labor Secretary Lori Chavez-DeRemer, leaders from the CFP Board, FPA, NAPFA, and XY Planning Network argued that the rule fills critical regulatory gaps left by standards like the SEC’s Reg BI. The letter cited research showing that 92% of Americans expect fiduciary advice, even though current laws don’t always guarantee it—especially for one-time retirement guidance. 

The organizations pushed back on claims that fiduciary rules restrict access to advice, pointing to firms like XYPN that serve younger, mass-affluent clients without asset minimums. The coalition also praised the rule’s efforts to modernize outdated protections, especially regarding insurance products that currently fall outside federal fiduciary oversight. 

Finsum: Financial advisors should watch these updates because they will affect their practice management. 

The U.S. wealth management industry enters 2025 with strong fundamentals and surging demand for advice as Americans accumulate more wealth and face increasingly complex financial decisions. Over the past decade, revenue from fee-based advisory relationships has grown significantly, and the number of human-advised relationships is projected to rise by as much as 34% by 2034. 

However, a looming shortage of advisors—an estimated gap of 100,000 by 2034—threatens the industry’s ability to keep pace, prompting firms to modernize operating models, leverage AI for productivity, and intensify recruitment efforts. Amid this talent crunch, advisor transitions will become more common, and ensuring continuity in client service will hinge on robust recordkeeping practices, including detailed CRM usage and clear documentation of financial plans and client preferences. 

Properly managed data is not just a regulatory requirement—it also allows new advisors to step in seamlessly and sustain trust when client relationships change hands. As firms evolve, the combination of human guidance, well-preserved institutional knowledge, and tech-driven scalability will be critical to supporting the next generation of clients.

Finsum: Leveraging technology to optimize your transition will be key for both new advisors and clients. 

In today’s fast-evolving financial landscape, your broker-dealer relationship plays a central role in the success of your practice. Whether you’re seeking greater flexibility, higher payouts, or more modern tools, here are the key factors to focus on when evaluating your next move:

• Payout Structure: Look for a competitive payout that balances high earnings with strong support services.
• Technology and Tools: Ensure the broker-dealer provides modern, integrated platforms that streamline your operations and enhance client service.
• Culture and Values: Partner with a firm that aligns with your philosophy and genuinely prioritizes advisor success.

If your current BD no longer aligns with your goals, values, or client needs, it might be time to explore alternatives.

Finsum: Choosing the right broker-dealer is more than a financial decision—it’s a strategic step toward building the practice and lifestyle you envision.