The recently published BISA-Cerulli study, Improving Recruitment and Retention Throughout Advisors’ Lifecyles, identified the lack of sunsetting plans for advisors as a weakness in banks and credit unions.  Many of the 20 advisors interviewed expressed concern about the lack of plans to monetize their books and transition their clients to a successor advisor.

But the availability of advisor sunsetting plans in financial institutions may be more common than the study observed.  At the recent Kehrer Study Group for executives who manage investment services inside a bank or credit union, Arthur Osman asked the group which practices have a plan to monetize the advisor’s book and transition the clients to a new advisor.  More than half of the group raised their hands and described their succession plans.

This dissonance with the BISA-Cerulli study might be due to the limited number of firms studied—just 14.  We’ll try to get a better read on the spread of sunsetting plans in a forthcoming survey.

The group also disagreed with another study finding on sunsetting plans, which criticized many banks for “a patchwork approach with individually negotiated deals.”  The consensus of the room was that it is critically important to tailor each succession plan to the individual needs of each advisor.  The elements of a sunsetting plan can be traded off to optimize an advisor’s objectives. “There is nothing worse than having a succession plan in place that doesn’t work,” observed one participant.

Forty executives from banks, credit unions, third party broker dealers and product providers attended the Spring meeting of the Kehrer Leadership Study Group at UNC’s Rizzo Center in Chapel Hill May 18-19.  The next meeting of the Kehrer Leadership Study Group is September 21-22 in Durham, NC.