Need A Succession Plan? A Boston-Area Hybrid RIA Can TAG In

One Boston-area hybrid RIA believes it has cracked the succession planning code.

Earlier this year, Trust Advisory Group, a $300 million AUM firm based in Woburn, Mass., launched “TAG 2.0,” a program designed to link aging independent advisors with smaller books of business with trained next-generation successors to allow them to transition out of their practice at their own pace.

Succession plans remain a troubling blind spot for the financial industry – according to TD Ameritrade’s FA Insight People and Pay 2017 study, only 37% of RIAs reported having an adequate succession plan in place, and throughout the study’s eight-year history, the number of firms self-reporting an adequate succession plan has fluctuated between 32% and 43%.

But the problem is much more severe among smaller advisors, said John Cadigan, Trust Advisory Group’s national sales manager.

“Something like 80% of advisors with $50 million or less do not have a succession plan,” he said.  “It’s an industry-wide issue, considering that 30% of advisors will age out of the business over the next five to 10 years. It’s almost at a crisis level for the industry in that they’re not prepared for such a demographic shift.”

It’s become such an issue that SEC, Finra, the Department of Labor and some state securities regulators have considered requiring succession planning for advisors, and wirehouses like Wells Fargo have started rolling out and updating their own succession programs.

According to William McCance, president and CEO of the Trust Advisory Group, TAG 2.0 was born while he was mapping out the future of Trust Advisory Group.

“We have an age problem,” McCance said.

TAG Advisory Services's Insight

Trust Advisory Group, Ltd. and its innovative TAG 2.0 program are featured in the December issue of Financial Advisor Magazine.