A show of hands at the Exchange 2026 conference in Las Vegas revealed what industry insiders already know: Only about 20% to 25% of financial advisors have a formal succession planning strategy in place.
That gap between need and action became the focus of a panel discussion where industry experts gathered to discuss why succession planning remains an afterthought for most advisors and what separates successful transitions from failed ones.
The conversation, moderated by Stacy Coffey of Rise Growth Partners, brought together Jorge Bernal from EP Wealth Advisors, Andy Kalbaugh of The Wealth Consulting Group, and Matt Carter of Turkey Hill Management. Each brought a different perspective on advisor exits, from internal transitions to external sales.
The panelists identified several psychological and structural barriers preventing advisors from formalizing exit strategies. For many, the firm represents a life's work, making the concept of stepping back fundamentally difficult. Advisors often mistakenly view succession as a one-time event rather than a long-term process that typically requires three to five years of preparation.
"It's just really hard for most people," Kalbaugh said. "It is the biggest asset they have."
The panel also pointed to what's sometimes called "cobbler's children syndrome." Just as the cobbler who spends all day making shoes for customers neglects to make shoes for his own children, advisors dedicate their expertise to planning for clients while their own business planning takes a backseat.
Bernal noted this irony, explaining that advisors often tell themselves they'll get to succession planning later, only to find themselves unprepared when the time comes.
Another challenge is finding next-generation talent that possesses both the skills of a client advisor and the risk tolerance of an entrepreneur. The practical ability to identify, hire, develop, and execute a succession plan proves extremely difficult alongside daily responsibilities, Carter said.
Building Durable Transitions
The experts distinguished between internal and external succession paths, each with unique hurdles. Internal successions face financing challenges, particularly for large, complex firms. Kalbaugh illustrated the challenge with a hypothetical: A 31-year-old advisor trying to finance a practice generating $8 million in gross revenue faces difficult financing hurdles.
Solutions exist, though. Sellers can structure deals to be paid over time rather than requiring immediate financing. Larger firms also facilitate financing for their advisors, making internal transitions more feasible. Smaller practices prove easier for younger advisors to acquire, Kalbaugh said.
However, preparation matters more than structure. A firm where every client relationship runs through the founder is less durable than a team-based approach, according to the panel.
External sales, meanwhile, are rarely about securing the highest check. Bernal noted that deals are increasingly driven by a "race for service." Founders seek partners to provide in-house tax, estate planning, and advanced technology that small firms cannot afford independently.
Many founders also pursue external partners to offload operational burdens like HR, compliance, and facilities management, allowing them to return to client work, Carter said.
Trust Over Paperwork
The panel emphasized that culture and trust form the bedrock of any deal, often outweighing legal agreements. Bernal stressed the importance of alignment, noting that deals struggle when partners don't share the same service mindset or growth orientation.
Carter said trust is the most important element these deals come down to. Coffey added that if partners can't navigate critical moments when a deal feels like it might fall apart, the partnership will likely face other difficult days ahead.
Kalbaugh added that equity and modern investment structures help ensure both parties row in the same direction. Economic and philosophical alignment reduces tension that emerges when outcomes diverge.
The panel also recommended advisors talk to clients early about future plans. Clients want what's best for their advisors, just as advisors want what's best for clients, Coffey said. Early transparency prevents surprises and demonstrates that transitions benefit everyone.
Kalbaugh offered practical advice for advisors looking to prepare. Start by scrutinizing financials to ensure they hold up under buyer scrutiny and confirm retention agreements are in place for staff.
The most critical step, though, may be delegation. Advisors need to free up what Kalbaugh called a "material amount of your calendar" to manage the succession process properly, which means handing off tasks to team members well before starting conversations with potential partners.
A message from Advisor Perspectives and VettaFi: To learn more about this and other topics, check out some of our videos.
More Financial Planning Topics >
