Succession Planning Strategy for Your Financial Services Business

The financial services marketplace is changing fast. Several dramatic shifts are happening simultaneously to create extraordinary opportunities over the next 15 to 20 years for financial professionals. But if you don’t have a succession planning strategy for these changes in advance, your financial services business that you’ve spent decades building and growing may suffer. Are you and your business ready?

Ameritas is proud to say we’re here to help. After more than 138 years in the business, we know a few things about planning for a strong future no matter what economic conditions prevail.

Here’s what you need to know.

A critical transformation in our client base

Perhaps one of the biggest developments we’re watching is what the industry refers to as “peak 65.” Approximately 4.1 million Americans will turn 65 every year through 2027.¹ At the same time, we’re also experiencing one of the biggest wealth transfers in history, with baby boomers transitioning about $84 trillion in wealth to younger generations over the next 20 years.²

Even as we face this transition of wealth, the number of financial professionals in our industry is decreasing. This can create tremendous opportunities to not only grow your business, but also for you to bring new agents in to take over your business in the years to come.

To leverage these opportunities effectively, you need to have a succession plan in place.

Ameritas can help. Our practice management and advanced planning teams can help you transition your business to future generations effectively. We have the tools to help you be successful today—and tomorrow.

Why it’s time for you to consider succession planning

One of the benefits of working in the financial services industry is that we don’t have a mandatory retirement age—you get to choose when you want to retire. Within our financial professional base, we typically see owners consider selling their businesses when they reach their mid 50s or early 60s. Accordingly, we often counsel our financial professionals to begin putting a succession plan in place in their 40s and early 50s.

No matter what your current age or your timeline for a sale or business transition, you should start planning several years in advance. If you’re looking at selling the business, it takes time to create a list of items you need to prepare, find ways to market the business, and ensure that the business is in proper order to transition to the next generation of financial professionals. This could involve technology systems, client profiles and more.

Even if you expect to shift your business to the next generation of your family, there are still many elements to consider that will help ensure your firm continues to thrive.

How does Ameritas help with succession planning?

At Ameritas, we have advanced planning and practice management teams that work closely with our regional vice presidents (RVP) to help you evaluate the value and makeup of your business. Our RVPs are very active in the field and aware of what is going on within their regions, our company and the industry. They can help you find potential buyers who may be able to take over your business or start working with you to transition it to the next generation.

It’s an exciting time and a great opportunity, but it’s also a little scary and you need to be prepared for it. You owe it to yourself and your clients to walk through this transition with an industry expert supporting you every step of the way.

Opportunities for new financial professionals

For newcomers considering a career as a financial professional, there is tremendous opportunity. We’ve experienced a dwindling agent population in our industry for the last 30 years, while many of our financial professionals are now reaching retirement age.

According to a U.S. Bureau of Labor Statistics (BLS) report shared by The America Works Report, the number of insurance professionals aged 55 and older increased 74% from 2010-2020. This finding led the BLS to estimate that over the years 2020-2035, 50% of the current insurance workforce will retire, leaving more than 400,000 open positions unfilled. All facets of the insurance industry will struggle to replace these workers at every level, particularly because millennials have not shown significant interest in insurance careers – less than 25% of the industry is under 35.

On the investment side, we’ve seen an uptick, but the numbers are still modest for a population that has grown from about 150 million to 350 million in the last 30 years. Accordingly, we expect the demand for wealth management products and services to increase substantially in the years to come.

It’s time to work on your business…not just in it

As a financial professional, you’re the heart of your business, running it day in and day out. While you work tirelessly to help ensure your clients’ financial well-being and success, it’s equally important to ensure that your own business receives the support it needs to thrive.

Whether you want to safeguard your business against an unexpected event or an accelerated retirement timetable, or simply to provide a smooth runway to a successful sale, the right support system can make all the difference. With Ameritas, you’ll have the expertise and resources you need to help position your business for a prosperous future.

To learn more about succession planning at Ameritas, you can download our Succession Planning Guide or contact our practice management team for personal assistance.

Jeff Graves
Senior Vice President, Agency and Field Distribution, Ameritas

Sources and References:
¹The Peak 65 Zone is Here, Alliance for Lifetime Income
²Cerulli Associates