The Value in a Strong Vision for Succession Planning

While mergers and acquisitions among financial advisory firms continue to set records, a recently published report by wealth management consultancy Ascentix Partners recommended that firm founders or owners figure out the vision behind their succession plans before making deals.

Clear succession strategies are not prevalent, as a 2025 survey by wealth management platform Kestra Holdings determined that three-quarters of surveyed firm owners looking to retire in the next decade lacked a formal plan to transition management responsibilities to potential successors. Similarly, the IG Wealth Management Advisor Perception Industry Study, published this month, found that 44% of the approximately 100 surveyed Canadian advisers looking to retire in the next decade lacked succession plans.

Ascentix Partners’ report, “Founders Should Plan a Legacy, Not Simply an Exit,” offers a framework for firm owners to think about the people behind a succession plan—including how clients and employees would be affected under new leadership, as well as life goals after transitioning from leadership.

“It’s no longer how that adviser makes the most from a transaction, it’s how they spend their time, how clients and employees thrive after [the founder steps back] and how to secure a long-term future for their spouse and children,” the Ascentix authors wrote.

Firm founders and owners are advised to identify their businesses’ core values, principles, mission statement and aspects they want to preserve through a sale, internal succession or minority investment. Examples include deciding that family members or certain staff will remain as leaders; retaining key clients; or continuing to service a particular community.

Next, Ascentix recommended that a founder or owner gather trusted legal, tax and estate experts to assist with the details of their succession plan.

“Your legal counsel is your partner, so you need to feel there is a personality fit and that they will be responsive, protect your interests and be practical and solution-oriented,” said Craig Sklar, partner in and co-leader of the wealth management team at Seward & Kissel, in the report.

Determining a Deal Structure

The founder or owner can then devise a path that matches their vision, defined by the paper as one of four categories:

• Maximum payout and quick exit;
• Ongoing founder involvement;
• Internal succession; or
• Family succession.

A quick exit can help with liquidity, as a majority of the business is typically sold for an upfront cash payment and often supplemented by an earnout. Ascentix encouraged sellers to not just take the biggest offer, but to determine if a potential buyer is a cultural fit, with the capacity and infrastructure to properly serve clients.

Founders looking to leave must also accept relinquishing control.

“The closest analogy I can think of is letting a child go off to college or watching them get married and start a life of their own,” said Joseph Lyons, co-founder of and wealth adviser at VestGen Wealth Partners, in the report. “The key mindset shift is knowing the business is in capable hands because you’ve chosen the right partner to carry it forward.”

Ongoing founder involvement can mean the founders keep a meaningful minority stake and sell a controlling interest to a strategic partner or private-equity backed platform. While such a deal can help with client retention, one downside can be a delay in successors taking over management tasks and developing their own relationships with clients.

Internal succession involves a founder selling equity to second-generation advisers over time, which can ensure firm stability and continuity. Potential downsides can include the G2 advisers not being able to buy the business, even with outside financing, and frustrations among other G2 advisers, making them flight risks if they are unaware of succession plans.

Family succession can involve a founder’s family members taking control to ensure continuity, but the report noted that they still need to have the necessary skills and experience to run the company. Careful estate and tax planning is also needed to prevent family dynamics turning into disputes, according to the report.

Valuation, Dealmaking

Once the value principles are set, Ascentix stated, the final step is determining the company’s value. The report recommended that founders and owners plan a succession several years in advance to maximize the company’s attractiveness to potential buyers.

Potential buyers appreciate a diverse book of business, with individual clients representing no more than 5% of total revenue, and a client base bridging multiple generations and backgrounds, according to the report. Buyers also look for “sticky” client relationships that are long-lasting and include a wide breadth of services, such as asset management, tax and estate planning, and recurring fee-based services. Integrated technology, including artificial intelligence tools that can help with scale and regulatory requirements, is another plus for potential buyers.

In order to avoid a rushed merger or acquisition, Ascentix recommended that founders or owners, before  spend years before any dealmaking strengthening operations, mentoring successors and gathering a team of legal experts. Formal negotiations can last six to 12 months and client transition and brand integration can take another one to three years.

“Timelines, deal structures and valuations matter. But so do purpose, relationships and continuity,” the report stated. “The founders and owners who navigate succession most successfully are those who treat it not as a transaction to complete, but as a future to design. And that requires thoughtful planning and careful preparation, years before the event actually occurs.”