Succession plans revealed as top reason for IFAs to hire new advisers

New research from network ValidPath has found that independent financial advisers (IFAs) rank succession planning as the biggest benefit that hiring an adviser would bring to their business, with more than half of IFAs expected to retire within the next five years.

The poll of ValidPath Member firms found that when asked to rank the top benefit that hiring advisers brings to their firms, the most cited was supporting succession planning (16%), followed by the ability to attract new clients (11%). The findings also show that one in five (20%) IFAs see hiring one or more financial advisers as a key part of their growth strategy this year.

When asked what would make hiring feel more viable, over half of those surveyed (51%) said they require greater revenue certainty before committing to hire new advisers, while 50% want to see significant growth in the amount of funds under management.

At the same time, 55% believe that having access to an onboarding framework would make the hiring process easier or more attractive.

With the end of the financial year approaching, over one in ten (12%) IFAs typically employ temporary staff to support other areas of the business to help manage workload during client review season.

Tim Riseborough, group operations director at ValidPath said: "It is encouraging to see that many IFAs prioritise succession planning when taking on new advisers. IFAs who adopt a proactive approach to succession planning are best placed to ensure a seamless transition for clients and staff, whilst also achieving the best possible valuation for the business.

"We have seen many IFAs in our network hire younger advisers with the intention of handing over the reins further down the line. This allows relationships and trust to develop organically over time, providing reassurance for clients."