He was a successor to three retiring advisors. Here’s what he learned

A decade into working in the financial services industry, Adam McInroy has purchased the books of not one, but three financial advisors. In each case, he says he was able to retain more than 90% of the exiting professional’s clients.

But the 41-year-old certified financial planner (CFP) with McInroy & Associates, which operates under IG Private Wealth Management (IG) in Bobcaygeon, Ont., says there’s more to succession planning than transferring clients and assets from one advisor to another.

“There’s a lot of intricacies that I, in hindsight, would have considered,” McInroy said.

Here’s what the three-time successor’s journey entailed and some of the tips he shared for other advisors considering picking or becoming a successor.

Internal successions ‘a godsend’

McInroy got his start in the industry as an independent advisor with IG.

After a year of working independently at the firm, he made the switch to his mother’s practice, McInroy & Associates, with the goal of succeeding her when she retired. He officially took over as the lead financial planner of the practice in January 2021. His mother retired in July 2023.

A few years before that transition, McInroy and his mother were approached by another advisor with IG who was looking to retire and sell their books. That advisor joined McInroy & Associates as an associate for nearly three years to ensure a seamless transition for both clients and staff. McInroy officially succeeded them in December 2023.

McInroy later went on to purchase “a percentage of the block of business” of another advisor with IG, a process that took a year and a half and wrapped up last December.

Each of these successions happened internally within IG, which McInroy called a “godsend” because it saved him the trouble of finding an independent lawyer, negotiating book value, and having to navigate different tech systems and firm logistics. Clients were transitioned to him within 48 hours of the agreed-upon succession date.

“There was no repapering of them. They didn’t lose any of their historical rates of return. Their statements looked identical,” McInroy said. “It was a very smooth client experience.”

While he wouldn’t characterize these successions as simple processes, McInroy said they were simplified due to all of them taking place within one firm. He said he’d jump at the opportunity to be the successor to another advisor, either within IG or externally.

“There are going to be hiccups and there are bumps, and you can’t plan for them all, but without a second doubt, … I’d do it again in a heartbeat.”

Earning client trust

The key to a successful succession is client satisfaction.

Ideally, a successor will meet a retiring advisor’s clients over several meetings, “instead of just a once and done,” to build rapport, McInroy said.

“That’s the hardest thing that we tend to discount. It’s not about the technical planning — most people in this industry, if they hold their CFP or similar designations, they’re technically sound,” he said. “It’s truly the relationship and transferring of that trust which is the hardest part of buying and selling the business.”

With his predecessors, McInroy said he felt pressure to earn the trust of clients the retiring, “tenured” advisors had built deep relationships with over several years.

He spent six years working alongside his mother, participating in “a lot of joint meetings with some of our bigger clients” and grasping her technical knowledge. His mother stayed on as an associate at the practice for two and a half years after that to mentor him and support the operational side of the business.

In another case, the retiring advisor scheduled meetings with clients to inform them about the succession plan, arranged for the clients to meet McInroy, and then scheduled follow-up meetings to ensure they were confident in the plan.

“It’s truly the relationship and transferring of that trust which is the hardest part of buying and selling the business.” 

– Adam McInroy

In his most recent succession experience, McInroy said he participated in a series of joint client meetings with the retiring advisor “to make sure that it was not only a good fit from a personality standpoint, but also that … we wouldn’t have to start from square one when it came to where [clients] were in their financial plan.”

“The idea behind that was the clients got to ask us questions,” he said. “We introduced the practice and the team and what they can expect, and it allowed for the clients to feel good about what was happening, and they weren’t going to be … hurt.”

Succeeding advisors should take the time to ask thoughtful questions and actively listen to their predecessor’s clients, McInroy said. For example, he took notes during initial meetings about clients’ concerns, passions and hobbies to reference in future meetings.

If a successor isn’t able to schedule multiple meetings with clients before the retiring advisor leaves, they should chat with them soon after to ensure clients know they’re still a priority and can reach out if they have any questions or concerns, McInroy recommended.

“When you’re taking client relationships over, trust isn’t built overnight or with an email,” he said. “It takes multiple interactions.”

Finding your match in a succession

Clients also benefit when a retiring advisor and their successor see eye to eye on things such as workflow and portfolio construction, allowing for continuity of care.

Sellers should have open and honest conversations with buyers about how they run their practices and approach different scenarios. They should then communicate their alignment on these things to clients, McInroy suggested.

“How we manage clients’ money is super important because it allows us to be able to continue on the same conversations with our clients, to address their fears and concerns, especially with market volatility, in the same way that they’ve been used to.”

Setting a realistic timetable

The main takeaway for McInroy through his succession experiences was that advisors need to begin planning early and set realistic timelines for when they plan to retire.

“We have this belief as advisors that we’re in an industry in which it doesn’t matter how old we get, we can still do it,” he said. “The biggest thing that I’ve learned is, when it’s time for me to retire, I gotta retire. Because we think we’re doing what’s in the best service of our client, of keeping that relationship, but odds are we’re failing those clients.”

Unless an advisor is keeping up to date on tax planning opportunities, investment strategies and what’s best for their clients, “we’re failing [them],” McInroy said, noting that some of the clients he’s worked with took notice when their advisor became less active as they aged.

His advice to seasoned advisors is to decide what they want to do in retirement. In other words, don’t just plan for the financial aspects such as valuation and dealmaking — focus on the emotional aspects, too.

“Having hobbies and interests that you’re already passionate about before you retire allows for a better overall retirement experience, both for you from a mental standpoint, but also a willingness to say, ‘Hey, I’m ready to step back because this is my next passion or next calling or next activity,’” McInroy said.

Approaching a retiring advisor

On the flip side, it can be tough for newer advisors to find a seasoned professional who’s willing to sell their book.

McInroy’s advice to budding advisors is to connect with people in the industry and at their current firm who share similar hobbies and traits, “because odds are if you’re sharing similar hobbies and interests and passions, your ethics and your mindset as far as how you work with clients is going to be probably pretty similar.”

Another way to solidify these connections is by asking a seasoned advisor for a coffee chat to pick their brain on different aspects of the job or industry.

“It doesn’t have to be with the goal of buying the book of business, but just, ‘Hey, I’m having some challenges with this client. How would you navigate that?’” McInroy said. “That’s really where a mentorship, an opportunity for idea sharing inside of offices, is really beneficial.”

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