With Advisors Transitioning Businesses, Beware Asset Losses – Study

Tom Burroughes

28 July 2025

With all the stories about wealth advisors transitioning their business, through sales and mergers for example, there is a risk of a significant chunk of assets going out of the door.

In a survey of US advisors by US firm Cerulli Associates, it noted that broker-dealers moving to an independent firm lose about 18 per cent of assets; advisors going from one independent firm to another lose about 11 per cent of such money.

Cerulli quoted one advisor as saying: “The actual transition of my practice itself was pretty painful because it was a fire drill, and hard having to meet with so many clients over such a short period of time."

The challenge of transitioning a business, and planning for succession, is a major issue for US wealth managers, many of whom are nearing retirement. Succession planning is an ever-present topic in wealth management in North America and much of the developed world. Trillions of dollars are in motion as Baby Boomers pass on. But the lessons don't just apply to end clients but to the men and women who advise on and manage the money. There's an urgency – in 2023, J D Power said in a study that the average age of US financial advisors was 56, and 20 per cent of them are within five years of retirement.

Cerulli said that about 10 per cent of advisors expect to transition their practice. The findings come from a study, sponsored by 55ip, called Advisors in Transition: Challenges and Best Practices.

Advisor transitions are expected to continue at a high pace in the coming years, primarily driven by M&A activity and a wave of retiring advisors, the report said. More than one-third of advisors, representing 41 per cent of industry assets, are set to retire in the next decade, and 15 per cent of retiring advisors expect to sell their practice externally; however, this figure rises to 33 per cent for independent RIAs.

The report said that to help retain assets, a growing number of wealth management firms are adopting technology that provides transition assistance and ongoing tax management.

In the second quarter of this year, Cerulli said it carried out in-depth interviews with 12 financial advisors who had transitioned their practices within the past three years. These advisors, who represented a diverse range of firm affiliations – including independent broker/dealers, national and regional broker/dealers, RIAs, and wirehouses – managed client assets ranging from $150 million to $6 billion. On average, participants had undergone three firm transitions, offering a longitudinal perspective on advisor movement.

Cerulli also interviewed executives from three private equity firms investing in wealth management, three asset managers, and two RIA aggregators. All interviews were conducted on a non-attribution basis throughout the first quarter of 2025.