The most important part of perpetuation planning is the part many firms aren’t doing – planning ahead. According to MarshBerry’s 2026 Technology & Governance Report, only 59% of insurance brokerage firms have a defined plan to transition retiring producers’ books, and just 32% have identified a future CEO or implemented a formal leadership development program.
Firms experience a variety of obstacles to planning for perpetuation, including a lack of qualified candidates, complicated family dynamics, or leadership challenges. Here’s how to overcome the most common perpetuation planning obstacles.
1. No perpetuation plan in place
Doing nothing is still a decision – and usually the most expensive one. Firms with no plan are forced into reactive decisions that reduce valuation and increase risk. To avoid this, treat perpetuation as an ongoing discipline, not a one‑time event:
- Begin planning 10–15 years before an expected ownership transition to preserve optionality and value.
- Start with a strategic assessment of the owners’ goals, including timing of exit, financial goals, and future legacy.
- Confirm that the chosen path aligns to the firm’s goals, values, and vision.
- Consult experts such as CPAs, tax professionals, and lawyers to create a legal, tax-efficient transfer.
This is just the tip of the iceberg when it comes to perpetuation. Ultimately, seek to build a written, flexible plan that is reviewed regularly and evolves with market and personnel changes.
2. Lack of qualified candidates
Naturally, thriving firms want to transition the business to high-performing employees who will continue the legacy of success. But these candidates rarely “appear” – they are developed over time. Leaders should work on identifying high‑potential employees early, continuously reinvesting in their progress. Establishing a formal leadership development pipeline, including building financial literacy, increasing operational and people‑management exposure, and encouraging accountability through performance metrics will prepare potential owners to take over when the time comes. This phased ownership approach helps to test capability before full transition, which reduces risk of a poor fit.
Communicate clearly whether ownership is possible, probable, or unavailable to avoid disengagement. From a recruiting perspective, an internal perpetuation plan can be highly attractive to potential candidates. Existing employees who are given the opportunity to move up in an organization are also more motivated, which drives productivity, innovation, and loyalty. The absence of candidates is usually a symptom of poor communication and insufficient professional development, not talent scarcity.
3. Lack of capital deters internal buyers
Many next‑generation leaders may be paid well – but do not have the necessary wealth to purchase a firm and are understandably hesitant to take on seven‑figure personal debt. To combat this, strengthen operating profitability and cash flow first as capital follows performance. Explore multiple capital solutions, not just bank loans, such as minority equity partners, ESOP structures, or hybrid internal/external transactions. Structure deals that reduce upfront buyer burden, such as gradual buy‑ins and/or performance‑based equity vesting.
4. The age of owners reduces options
Brokerage firms with aging owners may find that their options are limited as a considerable number of insurance professionals are nearing retirement. A company’s weighted average shareholder age (WASA), which shows the average of the shareholders’ age weighted by the percentage of stock they own, can help determine if the business is identifying the next generation of leaders and ensuring those folks have enough runway to purchase stock.
According to MarshBerry’s proprietary financial management system, Perspectives for High Performance (PHP), the Best 25% of firms (based on their financial performance, specifically organic growth) have a WASA of 43.2 years old, compared to the average firm of 53.9 years old. This doesn’t mean younger is better; age is less about years and more about urgency and readiness. Companies that focus on reducing WASA often increase organic growth. Producers who aspire to become stakeholders in the business will be motivated by ownership opportunities to drive growth and profitability.
5. Family businesses come with complexities
If family members are a part of the business, there can be additional complexities (relationships, emotions) that require careful navigation. Addressing emotional dynamics early can help avoid conflict and value erosion. Leaders should start by objectively assessing if family members possess the necessary skills and knowledge to continue operating on the same path. Discuss these expectations with the next generation – clarity is key when family dynamics come into play. Owners may consider hybrid solutions, such as having non-family members lead operations and serve as decision-makers while relatives retain minority ownership. Culture preservation should not come at the expense of enterprise value or sustainability.
6. Leadership gaps create structural weakness
A gap in leadership differs from “lack of qualified candidates” in that it’s about enterprise dependency, not people availability. In other words, the business may not function without the current owner(s) due to an imbalanced dependency on one individual. Key characteristics of this scenario include lack of second-layer management, centralized decision‑making, or key relationships managed by one person. What happens to those relationships when that person retires?
To combat this problem, firms should build a management team beyond the founder, reducing single‑person dependency. Investing in COO/CFO roles, sales management infrastructure, and documented decision‑making processes increases transferability and buyer confidence. Companies that outgrow owner‑centric leadership enjoy higher valuations and smoother perpetuations.
The most successful perpetuations are the result of intentional planning, leadership development, and financial discipline – executed early and revisited often. Agencies that plan early, develop people intentionally, strengthen financial fundamentals, and preserve multiple exit options can consistently transition on their terms, with maximum value and minimum disruption.