“Succession planning is never considered too early, yet is often discussed too late,” according to Macquarie’s Financial Advice Benchmarking Report, which surveyed 312 advice firms.
In reality, many businesses only begin thinking about succession when they are forced to, usually due to one of four trigger events: death, disability, retirement, or resignation. At that point, the most common response is to sell the business, largely because it is the quickest option.
Sale vs succession: timing matters
A business sale can typically be completed within 12 months. Succession planning, however, is a far longer process, often requiring three to five years to properly develop and transition a successor.
As Stephen Prendeville, founder and director of Forte Asset Solutions, notes “Succession takes three to five years, whereas a sale will take up to 12 months.” This timing difference is critical. Succession is not a transaction, it is a structured transition that requires planning, training, and alignment over time.
Early planning is essential
Since 2018, the advice industry has faced a reduced talent pool, making successors harder to identify and retain. This has only increased the importance of starting early.
The benefits are also measurable. According to Macquarie’s research, firms with an effective succession plan generated average profits of $684,148 per owner, compared to $355,446 for those without a documented plan.
Internal succession
Many firms first look inward and consider internal succession as a preferred pathway. However, internal succession isn’t always straightforward.
Younger advisers may be highly capable in financial planning and portfolio management, but they may lack the experience, motivation, or aspiration to take on business ownership responsibilities. This uncertainty highlights why relying solely on internal succession can be risky, and why firms need to keep both internal and external options open.
The risks of getting it wrong
Poorly planned succession can quickly create issues such as:
- Operational inefficiencies and duplicated systems
- Cultural misalignment and staff turnover
- Compliance and governance gaps
- Client disruption and service inconsistency
These challenges can erode both business value and client trust. Cultural fit, client continuity, and staff stability all play a major role in long-term success.
Preserve your legacy
If there is one consistent message across the data, it is this: succession planning takes time, often three to five years.
Starting early allows business owners to explore both internal and external pathways, prepare successors properly, and make decisions from a position of strength rather than urgency.
Most importantly, it ensures the outcome is not just a financial one.
The right succession strategy protects clients, supports staff, and preserves the legacy of the business.
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