Succession Disconnect Exposed: Only 6% of G1 Advisors Have Fully Documented Transition Plans, Study Finds 

Despite growing awareness of the need for succession planning, only a small fraction of advisory firm owners are fully prepared to execute it, according to new research from Kestra Financial and Bluespring Wealth Partners. The study, Bridging the Gap: Succession Misalignment Between G1 and G2 Advisors, highlights a significant divide between firm founders (G1) nearing retirement and their designated successors (G2), raising concerns about long-term business continuity. 

While many G1 advisors express confidence in their transition plans, only 6% of those planning to retire within the next 10 years have a fully documented succession plan in place. Over half struggle to relinquish control, with 40% fearing client relationships will suffer after they step aside. Meanwhile, G2 successors increasingly express frustration: one-third say they would consider leaving if no clear timeline is set, and only 41% report having received any equity ownership. Nearly 25% of G2 advisors are contemplating exit if no equity path materializes. 

The readiness gap extends beyond ownership. Just 35% of G2 advisors feel fully prepared for leadership, citing a need for greater involvement in strategic planning (49%) and business financials (47%) to gain confidence stepping into ownership roles. The lack of structured development threatens talent retention and could undermine firm valuations when owners eventually seek external buyers. 

“Succession planning is often viewed as tomorrow’s challenge, but our data shows that delaying planning has a negative impact on firms today,” said John Amore, President of Kestra Financial. “Not paying attention to succession planning or delaying a transition can expose any business to both talent and client loss, and ultimately it can lead to enterprise value erosion,” added Pradeep Jayaraman, President of Bluespring.

The research was conducted by 8 Acre Perspective and surveyed both G1 and G2 advisors across independent broker-dealers and RIAs, focusing on firms with at least $750,000 in revenue, and significant individual retail investor client bases. 

Kestra Financial, a division of Kestra Holdings, oversees $142 billion in assets under advisement (AUA). The Kestra Financial division includes Kestra Private Wealth Services, LLC (Kestra PWS), Kestra Advisory Services, LLC (Kestra AS) and Kestra Investment Services, LLC.