How to Recruit a Gen-X Successor on Your Own


Choosing a successor isn’t the easiest decision. Advisers commonly choose to partner with an RIA rollup or aggregator firm setting them up with a built-in succession plan. Nobody can argue with the convenience, but I’m not convinced this is the best option 100 percent of the time. If you’re looking to find a talented Gen-X successor to take over your business, there are plenty of solid candidates out there and it may give you more freedom and control than an institutional partner. Here’s what to keep in mind if you’re going this way.

Y Does Not Equal X

The financial planning profession and financial services industry is enamored by the “next gen.” While this term is intended to mean anyone younger than the baby boomers, all nex-genners are not equal. Although thought leadership is abuzz with talk of the millennial invasion, I think the best opportunity to find a great successor lies within Generation X.

Generation X is roughly defined as the cohort of people born between the early 1960s and the early 1980s which puts then at about approximately 39 to 59 years of age. According to the Bureau of Labor Statistics, there’s nearly as many Gen-Xers and Gen-Yers in the workforce—the difference isn’t that substantial—and according to Cerulli Associates, Gen X is going to be handed down $68 trillion in wealth over the next two decades or so. I would look for a Gen X-successor, someone who can relate to this population because he or she is a member of it.

Just look at where Gen X is now compared to Generation Y. They’re qualified investors now, have less of a debt abyss to navigate themselves out of, and are ripe for financial advice given that they’re at a more mature stage in their lives.

Yes, we all know that according to the numbers the wealth transfer to millennials is going to be the largest in humankind or however the saying goes. Sounds great! However, we aren’t there yet. At this point it’s all theoretical and the Gen-Xers are the ones upgrading their houses.

What to Look For

How do you know a candidate for a successor is a good one? Look at the adviser’s ability to develop new sales completely from scratch instead of through word-of-mouth or referral. While many advisers will boast that they love business development, the reality is that a small percentage of them actively develop leads. If your ability to retire happily with money to spend on the grandkids depends on another person’s ability to drum up sales, you’d better make sure they have the ability to snag a deal from thin air while the market is crashing down. Elsa, Anna, Olaf and all the rest of the Disney paraphernalia can get quite pricey after all.

Sales ability is the most important thing you can look for in a candidate. All other skills (practice management, technical competency, analytical prowess, to name a few) can be learned or bought. Successors who can sell, no matter what price tag they come with, are inexpensive; successors who can’t sell are one of the most expensive investments you can make in your business.

Questions to ask include:

  • What sales training programs have you completed?
  • How often do you engage in sales training?
  • Pretend I’m a prospect you’re cold-calling and pitch me a seat in your retirement seminar.
  • How many leads a year do you receive from COIs and how do you go about developing those relationships for mutual benefit of both parties?
  • If you had to find 10 new clients in a month from today, where would they come from (if you couldn’t get referrals from your existing base or people you know)?
  • How are you using technology to prospect, pitch and close a sale?

Finding the Successor

Now that we’ve established that you want a lean, mean, Gen-X money-making machine, how do you go about finding one?

Take advantage of your vendor relationships. Here’s where your vendor relationships come into play. Why? If the vendor is selling to you, they’re probably selling to other advisers. And if those other advisers are doing well enough to pay the same bill you pay, they must be doing something right. Call up the sales rep who sold you the product and have a talk. I’ll give you some names of firms who do a lot of business with our industry: Miller Canfield, Deckert, Black Diamond, Vestmark, Riskalyze, Orion and eMoney Adviser, among others.

Target industry organizations that you may be a part of or be able to access as an outsider. For example, the CFA Institute has a member directory and several LinkedIn groups for its local societies and member committees. These groups have tens if not hundreds of thousands of members on LinkedIn. In some cases, you don’t actually need to have the designation to become a member of the LinkedIn Group. For example, I am a member of the Certified Financial Planner (CFP) group on LinkedIn although I do not hold the designation. You never know whom you can meet online—start posting up!

Tap into the power of the network. Some events by the CFA Institute are for members only while others are open to the public. I’ve used these directories several times when I needed to find the right person for a business need I had and met with great success. Crack them open and start talking. If you are a member of CFA Institute or the Financial Planning Association, utilize your time at organization events to make connections with potential successors.

Try communicating with media influencers (or their staff and affiliates). You just never know who brilliant minds are connected with and what they’ll come up with if you ask. Have you ever been interviewed by a reporter? Do you know the editors of any financial magazines or can you get introductions to any? These people tend to know what’s up and know a ton of folks in the business. It’s always good to be in touch with the media anyways, right? I’ve met several powerful people this way.

Getting the Deal Done

On the flip side, what can you do to increase your attractiveness to a successor? Ask yourself if your brand is really friendly to people from the next generation. They tend to favor a less formal dress code and opt for higher work life balance. Are you offering Kashi and granola bars in your kitchen or is it more your style to swing by Dunkin’ Donuts to pick up a stash to share with the office breakfast meeting? Get acquainted with Whole Foods.

And while you’re at it, a healthy diet of social media can’t hurt. A strong digital presence, including a Gen X and Y friendly website, will work in your favor. When was the last time you posted a selfie to LinkedIn? Bring on the blogs and instant messaging.

Think about your office décor as well. Consider some comfy bean bag chairs and a treadmill nook instead of a stuffy mahogany-clad conference room. How Google of you!

This is probably the biggest transaction of your life; but it’s not going to be insignificant for your successor either. So whip out the MoneyGuidePro and create a financial plan for the successor’s next 30 years. Not only will this clear up any fuzzy expectations, it will also reduce uncertainty in his or her mind. Just like all you advisers say on your websites, a financial plan is the key to happiness and peace of mind.

Or however that cliché goes…

Sara Grillo

Sara Grillo, CFA, is a top financial writer with a focus on marketing and branding for investment management, financial planning, and RIA firms. Prior to launching her own firm, she was a financial adviser and worked at Lehman Brothers. Grillo graduated from Harvard University with a degree in English literature and has an MBA from NYU Stern in quantitative finance. See her website at

3 thoughts on “How to Recruit a Gen-X Successor on Your Own

  1. Are you sure that sales is the most important thing? Would you not prefer an Advisor with integrity, who was honest with clients and cared deeply about putting a clients need first? If an older Advisor worked for 30 or 40 years building a practice that was based on trust and putting the client first, why would they want to hand it over to someone who was really good at sales? That seems like the opposite of what you would want to do. I would think an older Advisor might want to develop some kind of rubric for assessing a successor that is based on their individual practice and the values they’ve developed over the lifetime of their practice – I am sure sales would be one of them, but I doubt it would be primary.

  2. Pingback: AQ Practice Management Articles Jan 7-11 | AdvisoryQuest

  3. About time someone mentioned that this is still a sales business. If you cannot sell,it is unlikely you will be successful.

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