By Robert R. Boeche, Partner; and Sarah Larsen, Securities Regulation and Compliance J.D.  of Shustak Reynolds & Partners, P.C. posted on Thursday, October 30, 2025.

Robert R. Boeche II

Partner

Location: San Diego, California
Phone: (619) 696-9500 (Ext. 122)
Direct: (619) 546-5502
Email: [email protected]

Do you have a plan for your business’s future? What would happen to your business if a sudden unforeseen event made you unable to work? Would your family or estate know who to contact or how to operate the business in your absence? Planning ahead is an essential part of protecting your business, your clients, and your legacy.

According to Schwab's 2024 Registered Investment Adviser (“RIA”) Benchmarking Study, only fifty-two percent (52%) of firms with assets under $250 million had a written succession plan[1]. Succession planning ensures your business, employees, and clients are accounted for in the event you are unable to continue your practice. Succession planning is the process of determining how you’ll transfer your business if a “triggering event” occurs, such as retirement, physical or mental disability, or death.

In April 2015, NASAA updated its model rules for Business Continuity Plans (“BCPs”) to include succession planning[2]. In June 2016, the Securities and Exchange Commission (“SEC”) proposed a rule requiring advisers to maintain a succession plan. Although this proposal was never finalized, it was notably not included in the mass withdrawal of rules this past June[3]. This omission could mean nothing, but it may also suggest the rule remains on the SEC’s radar. Succession planning is not mandatory, but regulators often request, if available, such plans during routine examinations as they would request BCPs and/or cybersecurity policies.

Unlike a BCP, which focuses on operational continuity during external disruptions, such as natural disasters or major events like the COVID-19 pandemic, succession planning focuses on people. It is designed to ensure business operations continue smoothly following internal disruptions, such as the departure or incapacitation of key personnel. As fiduciaries, advisers have a responsibility not only to put their clients’ best interests first, but also to ensure those interests are protected beyond their own lifetime.

In a survey conducted by the Institute for Corporate Productivity, ninety-three percent (93%) of respondents said that the pandemic impacted their succession planning[4]. Yet as of 2024, only about forty percent (40%) of all advisory professionals have a plan in place[5]. Most RIAs remain founder-led, with an average founder age of 57[6]. It’s anticipated that at least thirty-seven percent (37%) of financial advisers, collectively managing $10.4 trillion in assets, are expected to retire in the next 10 years, and yet many still lack a succession plan[7]. This represents trillions in assets with no management plan in place beyond the next decade.

Succession planning will look different for every adviser, but it provides critical guidance and peace of mind for your family, estate, and clients should a “triggering event” occur. Without a defined plan, advisers’ risk significant loss of business value and create unnecessary burdens for their clients and loved ones.

There are several distinct paths you may consider for your succession plan, such as an internal succession, external succession, merger or sale to an aggregator, or a sale to a third-party. A succession plan should address your specific business needs, short term and long term leave, valuation, transition process, and key contact persons.

Succession planning is especially important for solo RIAs. If you operate within an affiliate model in the independent financial advisory space, you should coordinate closely with your relationship manager. You may need to have your succession plan on file to authorize and clearly identify when a designated successor can step in. Other considerations include designating an additional user for IARD, drafting communications that could go out to clients in the event of a short-term or long-term absence, creating standard operating procedures for your successor, and reviewing your advisory agreements to ensure they allow “negative consent”[8] for assignments.

Procrastination is your own worst enemy and it is never too early to start planning for your business’s future. If you have questions about succession planning or want guidance on which approach to take, reach out and we can walk you through your options to help ensure your legacy is protected. 

Shustak Reynolds & Partners, P.C. focuses its practice on securities and financial services law and complex business disputes.
We represent many investment advisors, financial professionals, broker-dealers, registered representatives, investors and businesses.
Attorney Robert R. Boeche can be reached in the firm’s San Diego office at (619) 696-9500.

[1] Charles Schwab, An intentional approach to growth, Results from the 2024 RIA Benchmarking Study from Charles Schwab

https://advisorservices.schwab.com/resource/intentional-approach-to-growth-results-from-2024-ria-benchmarking-study-from-charles-schwab

Share This Article