Internal succession at RIA firms has never been more complex. Record external valuations, talent wars, and rising transaction volume have introduced new pressures that most internal succession plans were not built to absorb. In the March 2026 issue of the Journal of Financial Planning, AGS Partner Brandon Kawal identifies the traps most likely to undermine an owner’s succession options and makes the case for why avoiding them is now the primary goal.
More than half of owners would prefer to transition their business internally, according to private AGS research conducted in 2025. Despite that, the momentum of the external M&A market creates conditions that erode an owner’s ability to act on it. The new benchmark for internal succession, Kawal argues, is not completing a full transition, it is creating the future that preserves the option.
Prior guidance recommending 3-5 years of planning is no longer enough. External valuations increased 67% from 2019 to 2024, pricing many next-gen advisors out of any meaningful equity stakes unless given enough time and favorable financing. Most RIAs will now need a full decade.
Beyond timing, the article works through four additional traps:
- Confusing person-led growth with systematic growth
- Misapplying external valuations to internal deals
- Allowing the business to tilt too far toward execution or management
- Underinvesting in the talent and process that make a firm truly transferable
Each trap on its own is manageable but together they can back an ownership group into a corner. As Kawal writes: “The new success measure for RIAs is maintaining maximum optionality and making decisions from a position of strength.”