Ask most RIA owners how succession works and you’ll get one answer: sell the practice. That’s the default because it’s the most visible option — it’s what the large consolidators are actively marketing, and it’s the version of “succession” that shows up most in trade press. But a sale is really just one of at least four distinct paths, and for a lot of solo owners, it’s not the one that fits what they actually want.

1. The outright sale

You sell the practice, usually to a larger acquirer, for a purchase price paid mostly or entirely at closing. It’s the fastest route to liquidity and the cleanest break — you’re done, on a set timeline, for a set number. The tradeoff is that you generally give up ongoing involvement, and the buyer’s plans for your clients, your brand, and any staff are mostly out of your hands once the deal closes.

2. Internal succession

Someone already inside the firm — a junior advisor, a partner — grows into ownership. This is the path most owners say they’d prefer, since it keeps client relationships and culture largely intact. The catch is obvious: most single-advisor RIAs don’t have an internal candidate with the capital, experience, or interest to actually take on ownership. Which is exactly why this path, despite being the most preferred on paper, is the least common in practice for solo firms.

3. External succession with a phased handoff

An outside successor joins the practice and grows into ownership over time, often years, rather than buying it outright on day one. Equity shifts gradually as they take on more client relationships and operational responsibility, and the retiring owner typically keeps a real income stream through the transition instead of trading it all for one payment. It takes longer to fully exit this way, but it spreads the risk, and the reward, across the whole transition instead of piling it all onto a single closing date.

As an example: a $50M AUM firm structured this way might have the founder keeping the large majority of profit in the early years while a successor builds from a 10% stake toward 50%, then the founder gradually shifting into a paid consultant role as the successor’s ownership keeps growing. Modeled out over a decade or more, the founder’s total income across that arc can end up on par with, or higher than, a lump-sum sale — without the same all-or-nothing cliff at the end.

4. Merger into a larger, still-independent firm

You combine your practice with another independent RIA instead of selling to a consolidator outright. Done well, this can offer some of the stability and infrastructure of a bigger firm while holding onto more independence and cultural fit than joining a PE-backed platform would give you. It just takes longer to find a partner who’s actually a good fit — this path is slower and more relationship-driven than a straight sale.

Why most owners only know about one of these

The consolidators marketing to RIA owners are, understandably, marketing the path that ends with them acquiring your practice. That’s not the wrong answer for every owner — for some, a clean sale really is the best fit. But it means a lot of owners’ first real exposure to “succession planning” is exposure to one specific offer, not a look at the actual menu of options. Knowing all four paths before you take a call from anyone is the difference between negotiating from choice and negotiating because it’s the only option you’ve heard of.