Simultaneous client/planner retirement a challenge

Many financial planners belonging to the baby-boomer generation will retire around the same time as the majority of their clients, creating a greater need for well thought-out succession plans, according to Equity Trustees head of wealth management Phil Galagher (pictured).

Galagher said anecdotal evidence proved sending out a letter advising clients that their financial planner had retired was a common approach, often resulting in clients automatically being passed on to another adviser.

“Clients are simply passed on to another adviser, and end up feeling that they’ve got to start all over again with this new person,” Galagher said. “Many might feel it’s just as easy to look elsewhere for help.”

With the need for financial advice growing, rather than declining in retirement, Galagher said planners should avoid giving clients any reason to feel let down or abandoned when they retire, especially in the present economic climate.

“A more appropriate approach is for the adviser to contact all clients well before the planned retirement date to outline the succession plan, and to have any replacement join him or her at client meetings before retirement so that the history and the relationship can be transferred successfully,” he added.

Retirement services will be an increasingly important area for financial planners and will grow to form a major part of planning businesses, Galagher predicted.