Advisors want to "freeze time" rather than retire

Casey Jorgensen at Dynasty Financial found the narrative of the impending “silver tsunami” of advisor retirements to be compelling enough that she asserted herself at the forefront of helping advisors transition into their next chapter.

What she didn’t anticipate, however, was the sheer resistance from advisors to embrace their retirement.

“It’s a concept so fundamental to our industry, yet so ironically overlooked by its very practitioners,” she says. “Advisors don't really have an interest in retiring. They'll talk about it and they know they have to plan for it. But what they really want to do is freeze time and die with their bootstraps on until the last client leaves.”

The reasons for this are two-fold, says the head of Dynasty’s Institute for Adaptive Leadership (DIAL). For one, advisors aren’t interested because they enjoy the noble profession of helping clients and watching the recurring revenue. Boomers are also redefining what it means to retire by not fully retiring.

“They are a generation that enjoys being on the cutting edge. They like learning new technology, learning new things, and I think there's this great fear that if they do retire, they become irrelevant,” she says. “The worst-case scenario is they can’t actually afford to retire.”

But as she says, it's not always in the best interest of the clients - or the firm.

"It's actually fiduciary duty," Jorgensen says. "I would anticipate that the SEC is going to crack down on this, and make a mandatory retirement age."

One of the biggest challenges advisors face themselves is planning for that next chapter. Oftentimes, advisors have nothing to retire to because they haven’t thought enough about it, she noted. This is why she helps retiring advisors and their families create a succession plan for their own lives as well.

“I like to work with the advisor on developing [and updating] their LinkedIn page. Just because you're ending this career doesn't mean that you're not opening yourself up to other potential careers where people need consultants and mentors,” she says.

However, she cautions advisors to not be so quick to commit things because it can lead to stress.

“Don't commit to things, wait at least six months,” says Jorgensen. “You don't have to have everything figured out the day after you retire.”

When discussing succession planning with advisors, she emphasizes the importance of a formal plan. That formal plan should consist of including a timeline with an advisor’s “end date” or a certain date of retirement, the identified successor or successors, and in some cases, the operational plan which outline how advisors will communicate the handoff to clients, along with the firm’s evaluation and what the financial obligations for each party are.

Additionally, Jorgensen outlines several wellbeing initiatives advisors can take as they focus on moving towards the next chapter or life transition.

“Focus on your health and focus on re-engaging your relationships. Include them in the process, don't exclude them from the process,” she said, noting that divorce rates tend to go up when people retire “because they're interacting with each other more.”

She also advises to re-engage with old friends. “Find out what other people who are retired are doing and what their interests are and how they're spending their day

For advisors that aren’t fully retiring, Jorgensen remarked they should prioritize setting up “the next career and not play golf everyday.”

The definition of a perfect transition into retirement, Jorgensen asserts, is when all clients from the previous advisors’ book of business are retained and the retiring advisor is happy, saying “I wish I had done this five years sooner.”

If advisors open themselves up to the opportunity, there is life after retirement from financial advising.

“They’ll find that they have many interests and the skills that they've learned in this career are very valuable in many different areas,” says Jorgensen. “There should be no fear. It's a huge opportunity.”

As for Dynasty’s own succession plan, Jorgensen highlighted her goal is to create a holistic program for advisors pondering retirement that explores not just the operational and transactional sides, but also focuses more on the psychology side of how to make retirement planning the best experience.

“We should be doing more to leverage the expertise of these professionals, and making sure that that knowledge is transitioned to the next generation,” Jorgensen said, noting a lack of mentors and coaches.

“I think there's a way to create an emeritus type of program of these retired professionals so they still have the community that they love, they're still providing value, but they're teaching the next generation without stifling their growth and holding all the compensation and client relationships to themselves.”