One in three IFA owners to retire within 10 years 12 October 2015

One in three IFA owners to retire within 10 years

The wealth management M&A race is set to be ratcheted up a notch with more than a third of IFA owners planning to retire within 10 years.

An Investec Wealth & Investment survey – which canvassed 101 intermediaries who either own or part-own their firm in September – revealed that 36% have a view to retire within the next decade.

However, there does not appear to be any danger of a sudden exodus, with four in five of those surveyed planning to either adopt a staggered approach in the run up to full retirement or ultimately only semi-retire.

Regarding the future of their businesses post-retirement, almost half (49%) of IFAs intend to put their firm up for sale in its entirety, while 30% will seek to draft in an external successor.

Few will keep it in the family, with just 12% expecting to bequeath their business to relative and 21% having identified an heir within their existing team.

However, 65% of IFAs have not even taken succession planning under consideration, while only 12% have fully outlined and decided upon a process – a possible result of almost two-thirds (62%) conceding that they are more adept with client retirement planning than for themselves.

“The survey provides a useful snapshot on succession planning among IFAs,” Mark Stevens, Investec W&I’s head of intermediary services.

“It is clear that advisers consider all options very carefully with continuity of client service at the core. As most advisers plan to look outside their firm for a new owner when they decide to call it a day, the research suggests the right fit is vital and retirement will continue to be a key driver towards further consolidation in the sector.”