Many  financial advisors are failing to plan for themselves when it comes to having a succession plan in place for their business, according to a new study by SmartAsset, a New York City-based financial technology company.

From February 2, 2022 to February 21, 2022, SmartAsset surveyed a total of 463 financial advisors using its SmartAdvisor platform to find out their legacy strategy.

Two-thirds (64.36%) of respondents said they currently had a succession plan in place, with 38% of that group telling SmartAsset they implemented a succession plan in just the last several years.

Among those who do not have a succession plan,  56% said they planned on creating one at some point in the future.

Only 25% of respondents said their clients had asked them if they had a succession plan in place in the event they exited their business.

Most advisors (71%) with a succession plan said they intended to pass their business on to someone already working with the practice; 11% planned on passing their business to a family member; and less than 9% planned on selling their business to another firm.

Although 22% of advisors said they put a succession plan in place in just the last one to two years, 93% of them asserted that the outbreak of the Covid pandemic did not influence their decision.

"The onset of the pandemic created mass confusion and uncertainty for people across the globe, leading to detrimental financial impact, market volatility and job loss,” SmartAsset spokesperson Mark LoCastro said in the email. “As a result, people’s interest in personal finances and professional financial advice was extremely high during this time. In fact, according to our Google Trends search, the term “financial advisor” spiked 17% during the first six months of the pandemic compared to 2019’s average.”

He also maintained that at the outbreak of the pandemic, advisors were more likely to have focused on their clients’ finances than on their own.

“When financial advisory demand is high, we would imagine that advisors’ energy and attention would be more focused on capitalizing on the opportunity to not only service their current clients (who were likely contacting their advisors for guidance), but also to acquire new clients to grow their business—rather than developing a business succession plan," he said.

LoCastro also said he believed their reasons for advisors not having a succession plan were similar to the reasons most consumers don’t have a will or estate plan.

"For someone to transfer their entire business or estate to another party, something bad needs to happen to them, which can be difficult to even think about … let alone plan,” he said . “Succession planning takes a good amount of time, effort and monetary investment. Financial advisors may be so focused on building their business that it causes succession planning to take a back seat.”