The Advisory Career

Home Office Help with Succession Planning Programs

Helping advisors retain clients

New LIMRA research finds that 63 percent of financial services companies surveyed have developed or are in the process of developing formal succession planning programs for financial professionals who sell their products and services. Another 18 percent offer services to help financial professionals develop a plan themselves.

LIMRA data also shows that a little more than a quarter of financial professionals are aged 55 and older. For many of these individuals considering retiring or taking a less active role in their business, their clients expect a seamless transition from one financial professional to the other. In fact, 99 percent of clients believe the financial professional they work with has a succession plan in place. In reality, only half of financial professionals report that they are prepared for a transition.

Target: Higher Client Retention

Developing a formal succession strategy program for financial professionals and encouraging or incentivizing financial professionals to create a formal plan may lead to higher client retention rates1 as well as help bridge the gap between client beliefs and financial professional realities. Although, there is still a significant percentage (20 percent) of companies that either have not decided the role of the home office in helping financial professionals with succession planning or believe it is the financial professionals responsibility to do their own planning.

Of the companies that have formal succession planning programs, dedicate very few resources, if any, to help. Even still, just 1 in 5 eligible financial professionals takes advantage of company programs when they are available. One company surveyed mandates their financial professionals have a plan in place, while a few others offer financial incentives such as:

  • Providing an allowance to develop a plan
  • Paying the initial enrollment in Financial Professional Transitions Equity Management System
  • Offering a higher buyout for a financial professional’s practice if s/he has a plan in place
  • Financing a practice purchase

Prior LIMRA research has shown that the two most important factors financial professionals think about when considering a succession plan are identifying the right successor and feeling comfortable in that successor’s ability to maintain relationships with their clients.1 Yet, most companies avoid playing matchmaker and instead offer assistance with identifying potential candidates and running them through a screening process.

Because most companies take a passive role in helping financial professionals with business transition planning, organizations that offer service and support to assist in developing what is typically a complex and time-consuming task will differentiate themselves from those companies who believe it is not their business to help.



1 Protecting a Legacy: The Importance of Business Transition Plans, LIMRA, 2016
LIMRA, a worldwide research, learning and development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 64 countries. Follow us @LIMRA and @LIMRANewsCenter.