Retirement Planning Lessons for Emerging Advisers

The leading edge of the baby boomer generation turned 65 back in 2011. Since then, we’ve watched a large percentage of the adviser population move closer to that traditional retirement age. But the transition to retirement has been anything but traditional, as many boomer advisers have chosen to remain ensconced at their firms. It has created an interesting dilemma for emerging advisers waiting to move into more prominent roles. Should we worry about history repeating itself when these emerging advisers age? If so, what lessons can the younger generation learn from watching boomer advisers (not) retire?

Setting the Stage

First, it helps to understand the reasons boomer advisers are increasingly choosing to stay in the business.

It’s not your grandmother’s retirement anymore. The Bureau of Labor Statistics predicts that the percentage of 65- to 74-year-olds actively looking for work will increase faster than any other age group through 2026. When you think about it, it’s not particularly surprising. After all, we’re living much longer than was thought possible when the retirement age was conceived back in the 1930s. In fact, the notion of retirement is outdated—it’s becoming much more of a life pivot.

Retiring successfully isn’t just about money. Health and wellness, family relations, leisure and social activities, and personal growth and development are all important. And everyone copes with the question of what’s next differently. The thought of leaving something behind if there isn’t something more profound to move forward to can be paralyzing.

Boomers come from an era that embraced “living to work” as opposed to “working to live.” Work has been the centerpiece of life. Professional achievement and financial compensation have prominent spots on the self-worth scorecard. Advisers have poured their heart and soul into building a business and serving their clients, making many sacrifices along the way. Plus, these advisers have seen and heard firsthand the difference their advice has made on the quality of others’ lives. Who wouldn’t want more of that?

It’s their identity. When boomer advisers were young, they juggled the responsibilities of creating a family and growing a business simultaneously. Then they reached the point where something had to give. Often, it was the passions of an earlier life—hobbies, sports, socializing with friends. After the kids left home, satisfaction was derived from the work itself, rather than from rediscovering those lost passions.

Founderitis is real. Whether consciously or not, a failure to delegate keeps founding advisers in a power position. Rather than developing the next generation of leaders, they hold tightly to responsibility. But none of us can go on indefinitely, which means the business tends to pay the price.

The Lessons in the Data

Nature, nurture and circumstance have all played into the industry landscape we see today. It’s not that it’s a bad thing necessarily, but it has created challenges both for boomer advisers struggling with how to pivot to the next stage and for emerging advisers who are more than ready to take the reins. It also offers some lessons that emerging advisers may want to take to heart as they develop a vision for what they want their life and career to be.

  1. Broaden your horizons. Be careful that work does not become the one and only focus of life. Spend time with your family, nurture your passions and hobbies and try to ensure that fun is an ingredient in everything you do.
  2. Be careful about scorecards. The industry lists many advisers aspire to be named to include quantitative criteria like AUM and wealth of clients served, not qualitative data like family dynamics, life enjoyment or how you give back to society.
  3. Expect to pivot. Emerging advisers have seen firsthand how some boomer advisers are struggling with retirement. This industry is changing fast. A long-term career will undoubtedly include even more pivots than your older colleagues have experienced.
  4. Hire people who are smarter than you and delegate to them if you want a business that will outlast you. That means reinventing yourself to add new leadership value.
  5. Check your attitude and behaviors. Be open to new opportunities.

What does this really say? Build a life—not just a career—and then work hard to protect it!

Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network in Waltham, Mass.

Categories: Career Development, Succession Planning, Transition | Permalink.

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