Franklin Templeton Releases Findings of Research Study on Succession Planning for RIAs - New Report Reveals Insights on How to Optimize Negotiating Power for RIA Firms in Transition

From Franklin Templeton Investments
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San Mateo, January 29, 2019 – Franklin Templeton today announced the release of a new study titled Keys to Successful Succession Planning for RIAs. The study found that the majority of prospective sellers ranked succession planning as one of their top professional priorities, yet many underestimate the time it takes to properly plan succession. 

“As a client-centric approach is the hallmark of RIAs, developing a succession plan doesn’t always top the list of priorities, but it is actually one of the most important activities RIAs can undertake to address the future interests of their clients as well as their own,” said Pierre Caramazza, Head of the Private Wealth Division at Franklin Templeton. “As part of our mission to help advisors succeed, we took a deep dive into the challenges of succession planning to identify the issues that are most relevant to RIAs.”   

Franklin Templeton, in partnership with Institutional Investor’s Custom Research Lab, launched a research study comprising a survey and interview program among RIAs in North America. To explore RIAs’ succession planning practices and concerns, 162 RIAs were surveyed in conjunction with a series of interviews with RIAs and valuation consultants to gather additional insight into the survey findings.

Eyeing transition without a plan

While two-thirds of prospective sellers surveyed anticipated a change of ownership within five years, only 36 percent said they had begun in earnest the process of succession planning to ensure they will smoothly execute their transition to retirement.

By underestimating the amount of time and the expertise required to prepare for a transition, whether internal or external, RIA leaders may be at risk of suboptimal outcomes for their firm as well as for the future of their clients and employees.

For some firms this planning can involve preparing for an eventual buyer.

Optimizing negotiating power

In order to optimize negotiating power and position for the best possible outcome, RIA firms need to better understand what is most important to prospective buyers. 

The study found that the majority of prospective buyers (nearly 80 percent) identify as opportunistic acquirers, noting they are likely to acquire or merge only when presented with a very good opportunity.

Many buyers want to know that would-be sellers have a next generation of talent and firm capabilities in place, which places emphasis on the need for RIAs to institutionalize their firms – but only 11 percent of prospective RIA sellers said that institutionalizing their investment process and building in-house investment management capabilities are among their three highest priorities over the next three years. 

Another factor playing a large role in buying decisions is finding the right culture fit between the would-be buyers and sellers. In fact, nearly three-quarters of potential sellers and more than 85 percent of potential buyers said that cultural fit is a primary criterion in potential mergers or acquisitions, outweighing geography, brand and price. Some executives interviewed for the study noted that discovering any sort of last minute disconnect in this area has been a deal breaker in more than one major transaction.

Support for RIAs

“At Franklin Templeton, we are deeply committed to supporting the independent investment advisors with whom we partner,” added Caramazza. “Beyond providing a comprehensive array of investment strategies and vehicles, an institutional level of thought leadership, dedicated asset class specialists, portfolio consulting, and insights on topics of special interest are just some of the resources we offer to help RIAs meet their clients’ needs.”

The full report and additional findings can be found here. For more information, please visit


Franklin Templeton commissioned Institutional Investor’s Custom Research Lab to conduct a survey of 162 RIA leaders at small, medium and large US firms ranging from approximately $100 million in AUM to upwards of $5 billion. The survey was administered between September 5 and October 6, 2019.

About Institutional Investor

For more than 50 years, Institutional Investor has consistently distinguished itself as the world’s foremost financial publication and convener of global institutional investors. By leveraging Institutional Investor, exclusive memberships, forums, industry benchmarks, award-winning content, and workflow solutions such as capital placement, Institutional Investor is the essential hub for the world’s financial decision-makers.

About Franklin Templeton

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization operating as Franklin Templeton. Franklin Templeton’s goal is to deliver better outcomes by providing global and domestic investment management to retail, institutional and sovereign wealth clients in over 170 countries. Through specialized teams, the Company has expertise across all asset classes, including equity, fixed income, alternatives and custom multi-asset solutions. The Company’s more than 600 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With employees in over 30 countries, the California-based company has more than 70 years of investment experience and over US$649 billion in assets under management as of December 31, 2018. For more information, please visit  

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