2024 the Year of CEO turnover – what should we expect in 2025?

According to a 9/21/24 NewsNation article, CEO turnover is up over 50% from the previous year.

It’s not just in our industry.  But major companies like Starbucks, Nike, and Boeing to name just a few.

And it seems that every week there is another CEO stepping down (or being forced out) in the financial industry.

Is there an underlining “cause” for the increase in 2024?

Are the sun, moon and stars aligned (or misaligned if you are the CEO getting replaced)?

With the exception of a few news making departures, it appears that many of these departures are voluntary.

So, that got me thinking.

What is the financial industry going to look like in 2025? 

There will be a new crop of leaders who are eager to make their mark. 

But will they be willing to take risks and increase their company’s market share? 

Are they being brought in to “right size” the company after years of growth? 

Only time will tell.

But my hope is, the new leaders taking over in the financial industry will be those that want to help as many hard-working Americans as possible.

I hope they will be willing to embrace new business models in working with younger clients who don’t fit into the “old” AUM / commission model of financial services.

I hope that many of these new leaders will understand there are more generations who are willing to pay for financial advice and services other than the baby boom.

In fact, they will have to.

According to Neuberger Berman, 66% - 95% of children will fire their parent’s financial advisor after receiving their inheritance. 

However, a  study from Nuveen states that an advisor can have an 80% chance of retaining the child as a client if the financial advisor meets the child(ren) at a very young age.

This means that financial firms have tremendous risk of going out of business during the “great wealth transfer” or have a tremendous opportunity due to the “great wealth transfer”!

The firms that will fail are the ones that are doing business the same way they did ten years ago, with a focus on AUM or commissions.

The firms that will prosper will be the ones that embrace multiple business models, that will meet younger generations they way they prefer (online and on demand versus in the office). 

They will need to bring in services tailored to generations that have most of their wealth tied up in their 401(K)s until the great wealth transfer.

And they will be willing to charge the younger generation in a whole new way as the AUM / Commission model won’t work for them.

Firms will need to be creative.

They will need to embrace change.

And hopefully, that’s exactly why we are seeing the mass exodus of CEOs in 2024.

I hope that 2025 is going to be the start of a revolution in the financial industry starting with a new crop of CEOs.

I am optimistic and looking forward to see what the future holds for the industry that I love so much!