What’s Best for You and Your Legacy?
For financial advisors, succession planning is a legacy decision. If you’re years away from retirement or simply starting to think about the “what ifs,” how you plan for the future of your firm affects more than your balance sheet. It impacts your clients, your team, and the reputation you’ve spent years building.
There are two primary paths advisors consider: an internal succession, where the next generation steps in from within, and an external transition, which often involves partnering with a larger firm, or even selling. Each route comes with its own mix of opportunity and emotion (balancing control and continuity, purpose and profitability).
At the heart of this decision is something deeper: trust.
Who will care for your clients the way you do?
Will your life’s work be honored or diluted?
These are very personal questions. And that’s why succession planning should be approached with intention, clarity, and the right support.
In this guide, we’ll break down the pros and cons of each path, explore the hidden emotional drivers behind these choices, and help you uncover which route aligns with your goals, not just for your practice, but for your life.
What Is Succession Planning in Financial Advisory?
Succession planning is the intentional process of preparing for the future leadership and ownership of a financial advisory practice. For a financial advisor, it’s about more than just finding a replacement. It’s about ensuring that client relationships remain strong, business continuity is preserved, and the firm’s values live on well beyond retirement.
Despite its importance, many financial professionals delay creating a formal succession plan.
Why?
Because succession planning isn’t just operational. It’s also highly emotional. Advisors are often deeply embedded in the day-to-day success of their firm. The idea of stepping away, of entrusting your life’s work to someone else, can feel overwhelming.
Some avoid the topic because they haven’t identified internal talent or a potential successor. Others struggle with fear of losing control, of client attrition, or of bringing in an external candidate who doesn’t align with the firm’s culture.
These are real and valid concerns.
Yet without a clear succession strategy, even the most successful financial advisory firms risk getting cold feet during a leadership transition. Regardless of whether you’re an RIA owner, an independent financial advisor, or part of a larger wealth management team, the absence of a plan leaves your clients, team, and legacy vulnerable.
The good news?
A well-designed succession planning process can transform uncertainty into opportunity. If you’re grooming an internal successor, exploring an external partnership, or simply testing the waters, taking the first step is about protecting what you’ve built and preparing future leaders to take the baton.
Internal Succession – Keeping It in the Family (or Firm)
For many financial advisors, the idea of handing off the firm to someone they’ve mentored and worked alongside feels like the most natural path. Internal succession planning, whether involving a longtime colleague, junior partner, or family member, offers the comfort of familiarity. The philosophy stays intact, the relationships feel seamless, and clients are more likely to trust the process.
Pros of Internal Succession
When an internal candidate is groomed over time, the transition feels less like a handoff and more like a continuation. Clients maintain confidence because their trusted financial planning experience doesn’t change overnight. The wealth manager they’ve worked with for years may now take a leadership role, but the relationship and trust remain.
This model can also minimize disruption.
The business owner retains more control over the succession process, including the timing, client communication, and financial terms of transitioning ownership. For RIA owners who value culture and client continuity, internal succession often aligns closely with their long-term success goals.
Cons of Internal Succession
Yet this path isn’t without its challenges.
A major risk is talent readiness. Not every firm has internal talent that’s both willing and capable of stepping up. Many surveyed advisors express concern over whether their potential successors have the leadership qualities and the financial resources to truly take the reins.
And that brings us to a critical point: money.
Even if a younger advisor is the perfect cultural fit and has strong client relationships, most don’t have a few million dollars sitting around to buy out the owner at fair market value. As a result, many of these transitions end up “trading” at steep discounts, undervaluing the founder’s life’s work and creating tension around fairness and future expectations.
This isn’t just a financial hurdle. It’s an emotional one as well.
Without proper structure and support, internal transitions can stall. The lines blur, one day you’re the boss, the next you’re a coach. And without clear boundaries or planning around cash flow, estate strategy, or tax considerations, even the best intentions can get bogged down in day-to-day friction.
Still, with thoughtful design and a well-crafted internal succession plan, this route can deliver a successful transition, one that honors the firm’s founding values and empowers the next generation of financial professionals to lead with confidence.
External Succession – Partnering or Selling to a Growth Partner
For financial advisors seeking scale, relief, or a clean transition, external succession can be a powerful option. This approach typically involves partnering with or selling to a larger registered investment advisor (RIA), private equity-backed group, or strategic buyer who brings resources, systems, and capital to the table.
Pros of External Succession
One of the most immediate advantages of an external succession plan is the liquidity event. Regardless of whether it’s a full sale or a minority stake transaction, the business owner gains access to capital and turns years of equity into tangible value.
More than just a payout, these partnerships often unlock operational scale. Advisors benefit from built-in support across compliance, tax planning, financial planning, estate planning, and client service. It’s what many describe as “value beyond price”, a shift that allows financial professionals to step back from the grind and focus on vision, growth, or even retirement planning.
Many growth partners also provide structured leadership transition plans. For advisors nearing the end of their career or battling burnout, this means the ability to slowly exit the business, rather than face a rushed or chaotic departure.
Cons of External Succession
But for all the upside, there are valid concerns.
Some advisors worry about losing the soul of their practice. When a potential buyer brings their own systems, brand, and team, there’s a risk of cultural misalignment. As one advisor put it, “They’re in it for the money. I’m not.”
This disconnect can impact everything from the firm’s identity, to how client relationships are handled. Clients might feel unsettled by the change, especially if they sense a loss of personal touch. And for many independent financial advisors, giving up control, even in exchange for scale, can feel like a betrayal of the very independence they’ve worked so hard to protect.
Emotional Triggers Behind the Choice
The decision to sell externally is rarely just about numbers. Often, it’s driven by exhaustion or a shift in life’s priorities. Advisors who’ve spent decades building their firm often reach a point where time becomes the most valuable asset, not top-line growth. They’re not looking to hustle harder. They’re ready to spend a month in Italy or road trip through national parks, not just squeeze in more office hours.
Others recognize the reality of aging, not just in terms of health or market risk, but in the mounting pressure of doing it all alone. For some solo RIAs in their 60s, the hard truth is they can’t retire yet. They don’t have enough set aside, and they’re running a lean practice because they value freedom and don’t want a boss.
But freedom has its cost.
These advisors often find themselves wearing every hat from compliance officer, office manager, tech support, spending 15+ hours a week on $25-an-hour tasks that drain energy and add zero to the bottom line.
It’s inefficient, exhausting, and unsustainable.
Ironically, the very independence that once felt empowering is now keeping them stuck. They need the income, but can’t grow revenue because they’re buried in back-office work. What they really need is a partner, a larger firm that can take the non-revenue tasks off their plate, so they can focus on what they do best: serving clients and growing the business.
Ultimately, a successful transition through external succession depends on alignment of values, vision, and expectations. When done right, it can be a deeply empowering move that honors what you’ve built while opening the door to what’s next.
The Real Question – What Do You Want Your Legacy to Be?
At the heart of every succession planning conversation is a far deeper question: How do you want to be remembered?
For many financial advisors, their firm isn’t just a business but is also an extension of who they are. It’s years of late nights, early calls, tough markets, and moments of deep trust built with clients.
So when it’s time to consider succession, the decision is rarely about just valuation or structure.
It’s about identity.
It’s about ego.
It’s about legacy.
We’ve seen it time and again: a business owner ready to scale back after the birth of a grandchild. An RIA choosing stability over expansion after a health scare. A financial professional driven not by exit multiples, but by a desire to ensure that their clients are cared for long after they’re gone.
Succession planning becomes personal when you realize it’s not just about transitioning ownership but also about how your story is told.
What will clients say about you in 10 years?
That you cashed out?
Or that you made sure they were in good hands?
That you built something lasting?
No matter where you are in your journey, 10 years out, 2 years out, or just starting to think about the future, taking the time to define your “why” is the first step toward a succession plan that feels not just smart, but right.
Hybrid or Creative Paths – You Don’t Have to Choose Just One
Succession doesn’t have to be binary.
For advisors torn between internal continuity and external support, hybrid strategies are emerging as some of the most powerful and flexible solutions.
One popular model is the minority stake sale.
This allows the advisor to bring in a growth partner, which unlocks capital and infrastructure, while still maintaining control and grooming internal successors over time. It’s a best-of-both-worlds scenario that can accelerate growth without a full exit.
Another creative option is the “sell and secure” approach.
Here, the advisor sells a portion (or all) of the firm, gains liquidity, but remains involved, perhaps as a rainmaker, a mentor, or a strategic lead. This allows for continuity in client relationships and a smoother leadership transition, while also freeing up time and mental bandwidth.
Then there are partnerships with firms like Apollon Wealth Management or Little House Capital. These groups offer a tailored blend of support, from tax planning and compliance to reporting and estate strategies. Their goal is to lift the weight off your shoulders, so you can spend more time doing what you love, and less time managing back-office chaos.
The takeaway?
There’s no one-size-fits-all in business succession planning. Today’s most successful transitions are rooted in creativity, clarity, and collaboration, regardless of whether you’re exploring a full transition or just testing the waters.
Key Questions to Ask Before Choosing Your Path
No two financial advisors walk the same succession path. But the advisors who feel most confident in their choices are the ones who pause to ask the right questions early.
Here are three to start with.
What Role Do I Want to Play 5 Years From Now?
Are you envisioning yourself leading from the front, mentoring future leaders, or stepping fully away? Your answer shapes whether an internal succession plan, an external partner, or a hybrid approach makes the most sense.
How Important Is Cultural Fit vs. Operational Support?
Would you rather work with someone who aligns deeply with your values, even if they lack infrastructure? Or would access to best-in-class planning tools, tech, and tax support be worth a shift in your firm’s DNA?
Am I Planning Proactively or Waiting for a Crisis?
The best succession strategies are built with foresight, not panic. Planning ahead gives you leverage, options, and peace of mind versus scrambling to find a solution during burnout, illness, or market shifts.
Conclusion
Succession is more than a financial decision. It’s an emotional one.
It’s about letting go, passing the torch, and honoring what you’ve built. Regardless of whether you pursue an internal successor, explore a strategic buyer, or craft something uniquely your own, the most important step is starting early.
Because when you plan ahead, you gain freedom.
Freedom to choose your future role.
Freedom to protect your team and your clients.
Freedom to walk away on your own terms.
At buyAUM, we specialize in helping financial advisors like you explore those options with clarity and confidence. If you’re ready to benchmark your practice value or just want to start a conversation with a potential partner, we’re here to guide you with no pressure, no pitch, just possibilities.
Your future, your legacy. Let’s plan it with intention.
