When Is It Time for an Advisor to Retire?

(From the July 2021 Edition of eFORUM)

By Christine Timms

Deciding when to retire is a very personal decision. In this industry, we are fortunate that most of us can choose when we retire (exit our practice) and can usually wait until we are fully prepared. I will share my own reasons for exiting my practice, as well “hints that it may be time to start preparing for retirement,” that I learned from my own experience and from others in the financial advice industry.

As I approached my own retirement, I began to listen to other advisors’ thoughts about retiring and concluded that the timing of one’s retirement is an extremely individual and personal decision. We all have different priorities, different interests, and different obligations as well as different financial situations. The right time for me to retire was unique to me and is clearly not the right time for everyone. I retired at 60 and am confident it was the right time for me. I spoke to a 90-year-old former advisor who had retired at the age of 72. After 18 years, he remained confident that 72 was the right age for him.

After advising clients for 33 years, I retired from my practice in 2017. The following are a few reasons why I retired when I did.

Age: As I approached age 60, I sensed the reality of getting older and how short life can be. Financial advising is a demanding and stressful profession. Unfortunately, I’ve seen many people burn out and some die while still working. I often wondered when the individual would have retired had they known their own personal expiry date. I did not want to wait until I had health issues or suffered burnout.

Time pressure: Although I loved being an advisor and working with my team and clients, I felt pressured by the demands of the business even though I had delegated much of the day-to-day duties to my team. I became frustrated with the lack of time to fully satisfy other interests and responsibilities. I was always rushing to the next thing, rarely truly relaxing or taking time to enjoy what I was currently doing. I never seemed to have enough time for my 91-year-old mother, my teenage son, my wonderful husband, or my friends and other family members. I also wanted to spend more time doing things for myself like exercising, reading, puttering around my home, and spending time at the cottage. I wanted to stop feeling guilty when doing things solely for myself.

Desire to do other things: For years I have longed to write a book for clients and another for advisors. Upon retirement, I looked forward to being able to write these books without having to take time from my family or my clients. I love the financial advice business and hope to continue to contribute by writing handbooks for financial advisors and a book for clients about achieving financial peace of mind. The book for clients will show how clients benefit from and need professional financial advice.

Practise readiness: Fortunately, thanks to how I built my practice, I was satisfied with my career accomplishments and was very happy with those poised to take over my practice.

Financial preparedness: My financial plan indicated I could afford to retire and maintain the lifestyle I desired for myself and my family.

I remain pleased with the timing of my retirement. I have more freedom to relax and enjoy life now that I am free from the responsibility of responding to client needs. My days are no longer scheduled from start to finish, although I have developed a new routine. Retirement has allowed me to enjoy more of the pleasures of my pre-retirement life. I have also published three handbooks for professional financial advisors and begun work on the book for clients.

Hints That It May Be Time for You to Prepare for the Next Chapter

Retirement is an enormous change, therefore, we’re naturally afraid to hear the hints that are often right in front of us. We need to listen to ourselves and the people around us. I have listed many personal and business reasons that may indicate that it is time for you to consider retirement from your financial advice practice.

Personal reasons

You feel the need to spend significantly more time with your family.
You are feeling that you don’t have time to explore other interests.
You are becoming frustrated with the lack of time for non-work-related activities.
You are approaching conventional “retirement age.”
You are becoming envious of your retired friends’ freedom.
Your health is starting to suffer.
If you were told you were sick and dying, would you wish you had retired earlier?

Business reasons

You find yourself thinking that advising used to be more fun but now it is feeling more like work.
You have less patience for your clients.
You have less patience for your staff.
You have less patience for the demands of the industry (documentation, paperwork, etc.).
You are more easily offended or bothered by client comments that make you feel unappreciated.
You don’t want to put in the effort required to keep up with the rapid changes of the industry (products, technology, services, compliance, etc.).

I remember facing a situation a year or so before my retirement. I was conversing with the son of a recently deceased client who was acting as power of attorney for his widowed mother. He insulted my integrity. I did not say anything inappropriate, but I did lose my temper. I can’t remember ever losing my temper like that with another client. Looking back, I am sure that I had more patience and a “thicker skin” a few years earlier. I remember thinking, “I should have had more patience. I should not have lost my temper, and maybe I should be retiring soon!”

Start thinking about planning for your exit even if retirement does not appear to be imminent. Give yourself the flexibility to retire in response to changing circumstances. You help clients plan for their retirement every day. You owe it to your clients and team to do the same for your practice.

Christine Timms is the author of three handbooks for the professional financial advisor including Transitioning Clients and the Retirement Exit Decision. Go to www.christinetimms.com for more details. Christine can be reached on LinkedIn. Christine is also quoted in FORUM’s May 2021 cover story on buying and selling a book of business during a pandemic.