Almost 90 per cent of Financial Advisors lack a formalized succession plan

According to a study released by Investment Planning Counsel, two-thirds of advisors are at a point in their career where succession planning is crucial, yet most lack a well-crafted strategy

TORONTO, May 19, 2021 /CNW/ - Investment Planning Counsel (IPC) released a study today that provides insights into how prepared financial advisors are for succession, how they are planning for it and what they expect from their dealers in terms of support.

The study, conducted in partnership with Environics Research Group, revealed that although more than two-thirds of advisors are at a point in their careers where succession planning is either important, or becoming important, only 11 per cent have a formalized plan. The study found that:

• 69 per cent of advisors say they are nearing retirement or have started to formulate a succession plan of some kind.
• 11 per cent have a formalized succession plan, with 75 per cent of advisors saying they have only a rough idea or no plan at all.
• 90 per cent say that receiving dealer support for succession planning is important to them with 67 percent saying it is very or extremely important.
• Simplifying the process and formulating a high-quality plan are paramount, with 77 per cent of advisors saying each is an important part of dealer support.

"The risks of not having a plan are significant for advisors, their families and their clients," said John Novachis, Executive Vice President at Investment Planning Counsel. "They range from not having someone to carry on the business in the event of a sudden illness or loss of life, to the loss of confidence among clients, to jeopardizing an advisor's own retirement plans," he explained.

"Recognizing that Advisors needed more succession planning support, we started increasing our focus in this area three years ago," Mr. Novachis added. "We believe advisors have choices in how they succeed: to groom a junior successor, sell to a peer, or sell to a strategic buyer like IPC. We will work with advisors to determine their best choice, then help map and formalize their plan."

Growth still a priority

IPC's survey also revealed that regardless of where they are in their careers, advisors continue to prioritize growth over succession planning, especially in the wake of COVID-19. As with succession planning, advisors want dealer support to help drive their growth.

• 83 per cent consider growing their business a priority at this time.
• 85 per cent think dealer support is important for growth.
• 96 per cent feel 'having a positive impact on their client's financial success' is one of the most important reasons for growth.
• More than 96 per cent consider technological and operational support from their dealer as critical.

"We understand that growth is an ongoing priority, especially as Canadians turn to advisors for major planning decisions, including legacy and inheritance planning," explained John Novachis. Through highly engaged partnerships with advisors, IPC supports their growth based on their personal business and investment philosophy. This includes coaching, choice of portfolio management platforms, marketing and branding and strong technology enablement to drive business efficiencies and elevate the client experience. "From growth to succession planning, we are a one stop shop for advisors - allowing them to unlock value from their business when the time is right," summarized Mr. Novachis.  

About Investment Planning Counsel
Investment Planning Counsel Inc. (IPC) is an integrated wealth management company founded in 1996. IPC supports Advisors in delivering a distinctive client service experience by providing client-focused advice that helps Canadians live their dreams. With $27.5 billion in assets under administration, IPC is a member of the IGM Financial Inc. (TSX: IGM) group of companies. To learn more, visit www.ipcc.ca.

About the Environics Research Survey
The research study was conducted for IPC by Environics Research. It included a total of 358 independent financial advisors, with representation by advisor type (IIROC and MFDA advisors), region, language and assets under management. All participating advisors were members of the Environics Advisor Perception Panel. A probability sample of this size would yield a margin of error of +/-5.2% 19 times out of 20. 

SOURCE Investment Planning Counsel Inc.

Media Contact: Cameron Penner, [email protected], 1-613-818-8106