Getty Images As competition for the assets of retiring advisers heats up, the wirehouse firms have been updating their succession programs for aging advisers.
This year, the big four are knocking the dust off old succession programs and revamping them with new names, higher payouts and lower barriers to entry.
“The programs are much more robust than they were five years ago,” said Corey Kupfer, a partner at the Hamburger Law Firm. “The wirehouses have been reacting to competitive pressure from the independent RIA and broker-dealer space, and with the aging of the adviser population, they've really stepped up with new programs.”
As the average age of advisers climbs into the 50s, the stakes are high for all firms. Almost $2.3 trillion in assets — more than the total assets under management at most of the wirehouses — are held by advisers already over 60, according to 2012 data from Cerulli Associates Inc.
(Don't miss the latest on succession planning in this Special Report)
That pain is especially acute at the wirehouses where 30% of advisers are planning to leave the business in the next decade, a separate Cerulli report from last year states.
“There is noticeable uptick in the number of advisers keenly interested in this,” said John Alexander, a managing director for strategy and channel development at Wells Fargo Advisors. “A lot of advisers are asking for advice about the best way to do it, so we're developing resources and putting a great deal of capital into it as well.”
The basic processes for retiring at a wirehouse are similar across the firms. They all aim to provide retiring advisers who meet certain criteria a share of the total revenue from their book for up to five years after they retire.
The wirehouses also have been refining that original plan, and adding more flexibility and options in recent years as new channels come into the marketplace.
“From an RIA perspective, roll-up firms are poaching from the wirehouses, as well,” said Alois Pirker, the research director at Aite Group's wealth management consulting unit. “The employee firms have been somewhat idle there and not so aggressive, and so I think they have realized there is a need in that space.”MONEY TALKS 
Payouts at the wirehouses have been steadily increasing and this year reach as much as 250% of an adviser's book of business, depending on length of service, size of the book and other firm metrics.
Advisers at higher end of the range are generally serving on a team, are 55 or older, have been with the firm for a good part of their career and have a number of fee-based accounts and younger clients.
Morgan Stanley is updating its Former Financial Adviser Program this year to provide additional payouts to both lower producing and top-tier advisers. Advisers who are in its top two clubs – meaning they meet certain production and length of service requirements – and are on a team are eligible to receive a payout of 50% of their trailing-12-month revenue, paid as a lump sum pre-retirement, in addition to post-retirement incentives, according to a person familiar with the changes, who asked not to be named because the plan update has yet to be announced to the firm's 16,000 advisers.
(Related: How switching firms before you retire can provide an extra windfall)
Bank of America Merrill Lynch's original Client Transition Program paid out between 70% and 80% of trailing-12 production over four years, but it was updated for 2013 to pay up to 160% of trailing-12 with a minimum of 100%.
The payout is matched with where the adviser falls on the production grid. For example, a $1 million producer at a 45% payout rate will take home 45% of the t
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