Pershing's Business and Succession Planning Guide Highlights Potential Pitfalls Facing Many Independent Advisors

February 12, 2012

JERSEY CITY, N.J., — Pershing, a BNY Mellon company, announced today the availability of a new guidebook, Developing a Sustainable Business and Succession Plan: An Independent Advisor's Guide, which examines the critical elements of business and succession plans. This continues an ongoing series of practice management guides being developed by Pershing Advisor Solutions to help registered investment advisors (RIAs) improve their business planning and execution.

"The risks of not having a business and succession plan can vary widely—ranging from having high client and employee turnover to developing a low growth trajectory. Neglecting to implement a well-designed plan remains a blind spot for many advisors—and can conceivably be in conflict with their fiduciary responsibility," said Kim Dellarocca, head of practice management at Pershing.

Developed with Advisor Growth Solutions, the guidebook reveals that many RIA owners have not sufficiently addressed succession, as independent studies indicate less than one-third of independent advisors have either defined or implemented a succession plan.

"Succession planning is a key fundamental challenge facing the advisor community over the next decade and beyond", added John Furey, Principal of Advisor Growth Strategies, LLC. "Building a strategic framework is critical for advisory firm owners seeking to maximize the value of their business and to ensure service continuity for clients."

Highlights from the guidebook include:

  • Key Elements of an Advisory Firm's Business Plan—To be effective, a business plan should serve a purpose and be treated as a living, breathing document where key elements are reviewed and revised on a regular basis. Key elements of focus should include: the company overview, market analysis, strategic plan and financial plan. Once completed, every firm should revisit their business plan on a regular basis to ensure it continues to meet the organization's needs and goals.
  • Succession Plan Options for Owners—RIA owners' choices for succession have never been greater; and in evaluating these options, owners of advisory firms should carefully perform their due diligence and align their personal goals with the strategic goals of their business.
  • Mitigating Risk and Protecting Owner's Equity—Anticipating potential detours that can occur prior to the execution of a succession plan can help advisory firm owners mitigate risks and remain on course to achieve the desired outcome. To help manage risk, RIA owners should estimate the overall impact of unforeseen events and take steps to protect ownership equity. Advisors might consider several legal and insurance provisions including Key-man insurance, Errors & Omissions (E&O) insurance, and buy/sell provisions that identify what will happen between owners should a variety of events occur.
  • Resources Available to Advisors—RIA custodians, independent consultants, advisor coaches, and strategic acquirers have all developed capabilities and services designed to help independent practices manage key issues and drive industry growth. In light of the significant amount of time required to develop comprehensive business and succession plans, advisory practices should consider leveraging key third parties that can provide best practices and create a process, timeline, and accountability mechanisms to aid in the development and execution of a successful plan.

About BNY Mellon's Pershing

BNY Mellon’s Pershing and its affiliates provide advisors, broker-dealers, family offices, hedge fund and ’40 Act fund managers, registered investment advisor firms and wealth managers with a broad suite of global financial business solutions. Many of the world’s most sophisticated and successful financial services firms rely on Pershing for clearing and custody, investment and retirement solutions, technology, enterprise data management, trading services, prime brokerage and business consulting.

Pershing helps clients improve profitability and drive growth, create capacity and efficiency, attract and retain talent, and manage risk and regulation. With a network of offices worldwide, Pershing provides business-to-business solutions to clients representing approximately 7 million investor accounts globally. Pershing LLC (member FINRA, NYSE, SIPC) is a BNY Mellon company. Additional information is available on, or follow us on Twitter @Pershing.

About BNY Mellon

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries. As of June 30, 2019, BNY Mellon had $35.5 trillion in assets under custody and/or administration, and $1.8 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on Follow us on Twitter @BNYMellon or visit our newsroom at for the latest company news.