Some firms are taking a team approach to advisor retirements, pairing senior advisors with junior ones for a more natural handoff.Jacob Wackerhausen/iStockPhoto / Getty Images
In an industry in which relationships are everything, the slow exit of senior financial advisors has become one of the most pressing challenges facing Canadian wealth management firms.
According to a recent report by Toronto-based Investor Economics, an ISS Market Intelligence company, 11 per cent of advisors are now over age 65 – and many of them show little interest in retiring.
For some, the decision is based less on financial necessity than identity, purpose and decades-long client relationships that are hard to leave behind.
“Every advisor I’ve met will tell you they’re the luckiest people in the world to do what they do,” says Jenny Chen, founder and chief executive officer of Catalais Consulting in Ottawa. “They stay because they genuinely love the work and the people. But the real issue is whether firms and leaders have the infrastructure in place to manage succession properly.”
Almost 40 per cent of advisors at full-service brokerage firms in Canada are over the age of 55, according to Investor Economics, and they manage about half of all assets under management and revenue.
“Trillions of dollars will be in flux in the next decade, and without intentional infrastructure and leadership, firms will struggle to retain those assets across generations,” Ms. Chen says.
As semi-retired advisors begin to scale back, many focus more on maintaining relationships than growing their books – a shift that can quietly erode a firm’s momentum and stifle next-generation talent.
“In practice, many advisors begin to semi-retire well before formally exiting,” says George Boahene, director of business advisory and succession planning at London Avery, an advisor-focused consultancy in Waterloo, Ont. “Clients may notice slower responses, fewer proactive check-ins, and limited strategic planning beyond basic maintenance.”
That quiet fade-out can ripple across the firm, says Kirk McMillan, president of Gryphin Advantage Inc. in Flamborough, Ont.
“A stagnant book is like a parked car in the middle of the highway – it slows everyone else down. Growth drags, resources get tied up, and younger advisors miss opportunities to inherit or build,” he says.
Firm structure matters, Mr. McMillan says. Those that pair senior advisors with junior ones benefit from a natural handoff that happens over time, whereas firms that leave advisors siloed are the most exposed.
“Where there’s structure, clients are retained; where there isn’t, books often walk out the door when the advisor finally leaves,” he says.
Kevin Hayes, Toronto-based partner at Vantage Talent Group, says older advisors need to be clear about what they want.
“For some, it’s about fully exiting the business. For others, it’s about staying involved while stepping back from day-to-day responsibilities like compliance or operations,” he says. “Either way, clarity on that vision is what separates a smooth transition from a messy one.”
Many larger independent wealth management firms have responded by developing formal succession channels that both retain clients and grow their own market share, Mr. Hayes says. Some offer share buy-out programs, where a retiring advisor sells portions of their equity to the next generation over time.
A common model is a staged buy-out: the successor purchases 25 to 30 per cent of the practice up front, then additional tranches in phases until full ownership is transferred.
This approach enables the senior advisor to unlock their practice’s value and gradually reduce their workload, while giving the successor time to finance the purchase, build client trust, and assume leadership without disruption.
Mr. Boahene calls teaming “the most powerful solution” for succession. “When done right, it transfers not just assets but the goodwill built through decades of relationships,” he says.
Edward Jones is using asset-sharing models, structured retirement transition programs and a “strong emphasis on teaming,” says Scott Sullivan, principal and Canada business segment leader. “These help advisors plan their next chapter while ensuring continuity for multiple generations of clients.”
At Wellington-Altus Private Wealth Inc., programs offer senior advisors the opportunity to bring younger talent into their teams and learn alongside them while building their own books. Steph Condra, the firm’s chief experience officer, says these teams are growing at “double or even triple the industry average.”
Looming regulatory changes, such as total cost reporting, could accelerate the pace of retirements and force firms to make sure successors are ready.
“Cost reporting will shine a bright light on advisor value,” Mr. McMillan notes. “Clients will be asking, ‘Am I getting what I’m paying for?’ Disengaged advisors will struggle to justify their fees. In that sense, it could be the catalyst for a faster generational transition.”