CKBlog: Strategies

Thursday, November 02, 2017

If Your Advisor Retires, Where Does That Leave You?

by Steve Haberstroh, Partner

The advice industry is structurally backwards. Many wealth management firms spend their marketing efforts and dollars pitching clients about advice on retirement planning, education savings or passing wealth onto the next generations. These are noble and valuable services. The problem is, these are typically long-term objectives and most advisors likely won’t be around to help bring these goals to fruition. 

Imagine working with an architect to build your dream home only to walk into the ground-breaking and be introduced to a new architect. Or you walk into your doctor’s office after months of discussing the treatment for a major health issue only to be introduced to a person you’ve never met before who will be taking over the process. Research tells us that most folks are setting themselves up for a similar scenario when working with their financial advisor. Numbers don’t lie.

Forget attrition—those advisors who leave the industry for a career change—but according to a recent report by Ernst & Young, 55% of Financial Advisors are above the age of 50.* It’s true, with age comes wisdom. Especially when managing investment portfolios for a living. There is no doubt that someone who has managed money through multiple cycles over several decades can provide significant value to clients. But if you believe Ernst & Young’s numbers, this means a majority of Financial Advisors may be busy planning their own retirement rather than helping you plan for yours. 

When do you plan to retire? Might your advisor beat you to it? If that concerns you, you are not alone. Even the Certified Financial Planner (CFP) Board of Standards sees this as a real issue. Earlier this year, Joseph Maugueri, a Managing Director at the CFP Board said, “We have more CFP professionals over the age of 70 than under the age of 30.”** Let that sink in ...

So next time your advisor asks you when you plan to retire, ask him the same thing. One of the things that sets CastleKeep apart is not only do we have a multigenerational team, but we are owned by multiple generations. This structure will enable us to deliver advice to multiple generations, for generations. The folks at CastleKeep aren’t going anywhere anytime soon.

* “The next generation of financial advisors,” Ernst & Young (PDF)
** “Addressing the Shortage of Millennial Financial Advisors,” Emmet Pierce, ThinkAdvisor

If you have questions or would like more information, please contact Steve: .(JavaScript must be enabled to view this email address).