Warren Buffett's Succession Lesson

In early May 2025, at the age of 94, Warren Buffett, the chairman of Berkshire Hathaway, revealed his plans to finally retire. For more than 60 years, he steered one of history's most prosperous investment companies. One lesson his extreme tenure illustrates is the significance of succession planning, particularly regarding those entrusted with your financial plan. While not impossible, it is unlikely that your financial advisor will work until age 94.

According to McKinsey, approximately 110,000 advisors, representing 38% of the total advisor population, are expected to retire within the next decade. If you work with a solo practitioner, their impending succession should raise questions about the continuity of care for your financial plan and investment management.

Making the Switch
Like a doctor-patient relationship, the role of a financial advisor generally lasts for years, if not decades, and may feel just as intimate. Your financial advisor knows where you work, about your family, and how much money you have, earn, owe, and spend. They know your financial goals and perhaps some personal secrets, too. Switching to a new financial advisor can feel scary, especially if you don't know anyone who has worked with them. A team approach can help with this transition. In practices where two or more fiduciary advisors work together, they can share the connections to ensure someone is always available to help.

The Team Advantage
Collective Knowledge: The financial planning and wealth management industry is vast and ever-changing. For a single advisor to be an expert in every aspect of tax planning, estate considerations, investment management, insurance, and retirement strategies is nearly impossible. A team approach focused on education means you benefit from specialists in these various topics. The best teams share collective knowledge, so everyone works cohesively on your behalf, and advisors work on salary, so no one competes for commissions and can avoid conflicts of interest.

Continuity of Care: If your solo advisor retires, experiences health issues, or takes a vacation, what happens to your investments? With a team approach, your wealth management continues uninterrupted, regardless of individual circumstances. The diversity of knowledge will also help identify opportunities and pitfalls that might otherwise go unnoticed.

Technology Integration: Teams typically leverage advanced technology more effectively, providing you with better reporting, more efficient processes, and enhanced security for your financial information.

If you are currently working with an aging financial advisor, especially one who is a solo practitioner, asking about their succession plan is a reasonable question. If they are considering retiring soon, understanding their well-defined transition plan will provide the necessary comfort that your financial plan will be executed seamlessly without disruption or confusion. The following questions may help you better understand their succession plan:

A natural follow-up question to a discussion about your retirement is, "When are you planning to retire?" If they indicate their plan is like Buffett's - to work into their 90s, what will happen to the practice if they die unexpectedly?
How are you attracting, retaining, and training new talent to ensure that I will receive the same continuity of quality service?
How will I be notified about the transition?

Warren Buffett's departure from Berkshire Hathaway reminds us all that even the greatest financial minds must eventually pass the torch.

Succession planning is not just a best practice – it's in your best interest as a client to ensure you will not be left scrambling or reassigned to a rookie advisor unfamiliar with your needs. By engaging your advisor in a meaningful discussion about their succession strategy, you're safeguarding your assets and reinforcing the trust you've placed in their guidance.

If you're concerned about the long-term relationship with your financial advisor and ready to consider working with a team structured to last beyond all our lifetimes, contact the Hurlow Wealth Management Group. The mission of the fiduciary financial advisors at Hurlow is to help clients find clarity, confidently make decisions, and feel comfort in retirement. For over two decades, that mission has attracted clients and grown the team of like-minded financial advisors and client service team members. The proprietary CFO Process established the firm as the Midwest's benchmark for financial planning standards.

Sources:
https://www.wsj.com/business/warren-buffett-reveals-he-stepped-down-after-finally-feeling-his-age-b060251f
https://www.mckinsey.com/industries/financial-services/our-insights/the-looming-advisor-shortage-in-us-wealth-management

Services offered through Hurlow Wealth Management Group, Inc., a Registered Investment Adviser. Hurlow Wealth Management Group, Inc. does not provide tax, legal or accounting advice. Advisory services are only offered to clients or prospective clients where Hurlow Wealth Management Group, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Hurlow Wealth Management Group, Inc. unless a client service agreement is in place.