Many financial advisors have a fear of retirement and are reluctant to close out their careers, according to a report by ThinkAdvisor.
The issue was the topic of an interview with Casey Jorgensen, head of the Dynasty Institute for Adaptive Leadership. Jorgensen helps advisors at Dynasty Financial Partners with the transition to retirement and has found many are reluctant to step away from their roles.
“The reason advisors hang on is entirely psychological,” she said. “[Potential] successors at firms are frustrated to the point where they’re leaving and starting their own firms.”
She said that while advisors are busy helping clients plan their retirements, they have often not given much thought to the next chapter in their own lives, and she provides them with guidance on preparing for the future.
“What it really comes down to is that they don’t know their identity outside of their career,” Jorgensen said. “They’re nervous about not having an income stream. They feel like they have nothing to retire to, yet they still have a lot of energy. Also, they don’t want to be a burden to their significant other or grown children.”
Jorgensen was previously a business development strategist with Raymond James and part of its succession and acquisition department.
She discussed the implications for the financial industry of older advisors continuing to stay on the job.
“At Dynasty, staff advisors are breaking away from the breakaways who opened their own firms because succession promises aren’t being fulfilled,” adding, “It creates a huge problem for the industry if we don’t talk about the softer side of retirement and help advisors who have built the industry.”
Jorgensen said firms do not impose a mandatory retirement age on their financial advisors because clients are so loyal to them.
She attempts to develop formal retirement plans with advisors that includes 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. She also helps them prepare for their personal next steps.
“We look at the advisor’s resume or create one and update their LinkedIn profile to set them up for their next opportunity, which [may come from] connecting with former colleagues,” said Jorgensen. “We talk about what they’re interested in outside of what they’re doing today.”
Contemplating the transition to retirement after a long and successful career can be extremely difficult for advisors, she said.
“It’s almost like grief counseling to some of them. I think I’ve made a career of making older advisors cry,” said Jorgensen. “It makes them reflect on who they are and their purpose, and what they really want out of life. Once I get to the root of what’s blocking them, though, they have this kind of light bulb moment. So it can be highly emotional, but in a positive way.”
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