Ageing adviser population challenging business succession plans

With the average adviser aged in their early 50s, their impending retirement could see the profession face significant succession challenges over the coming decade.

Based on a survey of 1,200 advisers and 590 practice heads, Adviser Ratings’ Australian Financial Advice Landscape report revealed the average adviser is now 52 years old and almost four in 10 (38 per cent) have 20 years or more of industry experience.

While this does offer an opportunity for intergenerational mentorship between industry veterans and new entrants, the report explained, it also presents a significant challenge for the future of businesses, particularly as just 18 per cent report having a succession horizon of less than five years.

Adding to this challenge, while some 23 per cent of practices now have a successor in place, up from 17 per cent in 2024, 61 per cent said they either don’t need a successor or haven’t found one yet.

In light of this, Kaizen Recruitment’s 2025–26 financial year market update reported a noticeable uptick in advisers looking to take over established client books, which it explained is largely being driven by a “wave of retirements among senior advisers”.

This, the firm said, has prompted firms to “prioritise succession planning and continuity of service for longstanding clients”.

Speaking with Money Management, Simon Gvalda, Kaizen’s manager of ESG, responsible investment, wealth management and financial planning recruitment, suggested this issue goes beyond the sheer lack of advisers in the profession.

Even discounting the small number of new entrants coming into the advice profession, Gvalda said having a younger adviser step in to take over the responsibilities of a retiring adviser can be a difficult process.

“It’s very hard to go, ‘We’ll just replace a 30-year adviser with somebody with two years’ experience.’ You are unsure if the clients are going to consider that a great trade-off, especially when they look at it from the perspective of a 65-year-old.”

While this isn’t to say that younger advisers are unable to provide appropriate advice, he suggested older clients may struggle to trust someone who they perceive as having far less life experience than them, despite their level of capability.

He added: “It’s going to take time for there to be enough up-and-coming new advisers to hit the market to replace all those that are retiring and leaving the industry.”

As businesses continue to face challenges in preparing for the future, the recruiter recommended that firms investing in structured onboarding, succession planning, and adviser development will be best positioned to capitalise on the current momentum.

Also speaking with Money Management, Nicholas Matheson, senior associate adviser at Sheffield Financial Group, said failure to address the lack of younger but experienced advisers will also hurt business owners who hope to sell before retirement.

“The business is only worth something if it can continue to carry on. If you don’t have good processes and systems in place and staff that can run the business post-you exiting, that really cripples the value of the business.

“The onus of fixing it isn’t necessarily just on those advisers. It’s not necessarily just on the associates, and it’s not necessarily just on the regulators. I think it has to be a collective effort, because adviser numbers are realistically probably going to fall off a cliff at some point pretty soon.”

Driving this home, the Hidden Value Report, produced by CFS 10x in partnership with Succession Plus, found that one in three (34 per cent) of surveyed advisers intend to exit the profession in the next five years. 

Despite this, 47 per cent of respondents said the business couldn’t operate effectively without the owner, signalling a potential if the owner was unable to return to work or had to sell the business unexpectedly.

“This suggests these businesses may have weak organisational resilience and a high degree of key person/owner dependence. In terms of exit readiness, if these businesses were forced to sell unexpectedly, they would likely be offered a much lower sale price than what they believe the business to be worth,” the report said.