Susan John, a former president of the CFP Board and NAPFA, had been planning for years to turn over the keys to her firm in Wolfeboro, N.H., to an internal successor. It didn’t work out that way.

“We had a succession plan in place in my firm, and we had, the other primary advisors had, different levels of ownership depending on their levels of longevity with the firm. In order to make our five-year plan work we needed to hire at least one but a couple of other people with skill sets that would eventually replace my skill set. … We spent a couple of years trying to hire somebody with the right credentials that wanted to work in a rural area or with clients that were all over the place.”

It had to be a CFP or CFA with an interest in managing portfolios who wanted to live in a 9,000-person town snuggled up next to Lake Winnipesaukee. She hoped the beauty of the town might attract young people wanting to raise children.

But her succession plan collapsed.

She wasn’t able to find anyone even though she was offering above normal salaries and ownership possibilities. “We had some applicants. One of the applicants was a young woman who lived in town. She said all the right things.” The applicant had kids in school in the area. But she eventually took a job in New York. John ended up selling her firm to F.L. Putnam Investment Management in 2019. She’s now a partner there.

And she says everybody in the industry is facing this same talent shortage. “The sorts of positions that are available for people who are kind of in the 35 to 50 age range, somebody who could come into your company right away and make a difference—the sort of training that was available to them is not the training that you need today,” John said. “You need somebody that’s got a more in-depth training whether it’s in financial planning or it’s in investments. And the people that have that training are already well employed and not interested in leaving their jobs.”

Her problem illustrates a talent gap and staffing dilemma that many financial advisors have found themselves in, especially as they look for exist strategies and come up with succession plans.

On the financial planning side, John says there is a lack of people who know the issues that matter to people and the ability to sit with somebody and find out what those issues are. “Either that or they have relied on software for answers and not their own knowledge space. … You have the ability and responsibility to dive into a problem. To learn more about annuities, to learn more about estate planning, to find out more about how the SECURE Act affects people. To find out about how divorce affects people.”

Many studies have been written about the succession crisis facing advisory firms. The Financial Planning Association and Janus Henderson Investors found a couple of years ago that as many as 73% of advisors had no succession plan. There could be myriad reasons for this.

One is the stereotype of single advisors who want to control every aspect of their businesses throughout their careers, only to find out too late that there’s nobody on staff with the clout, training, client trust and ownership stake in the firm to take it over.

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