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financial-advisor-plan

Is your succession plan in place and up to date?

Rarely does life or business play out as intended. This is not only true for your client base and their life story, but also for you as financial adviser.

According to Allan Gray research, not having a succession plan is a common worry that keeps advisers up at night. More than 60% of independent financial advisers (IFAs) surveyed by the company said that they didn’t have a comprehensive plan in place, while almost 15% of IFAs said that they have no plan in place. “In the absence of a succession plan, advisers face several regulatory, personal and business risks. A robust succession plan is one of the ways that advisers can boost the value of their business,” Carl Lategan, head of IFA distribution at Allan Gray advises.

“A succession plan can also allow you to retain strong performers and ensures that your clients will be well looked after you exit from the industry,” says Lategan. “Not having a plan for your business is akin to your clients not having a financial plan.”

Yet, as the Allan Gray research shows, many financial planners fail to have their own financial future mapped out.

  • Many reported having a plan in place but that it was out of date
  • Others have an informal agreement in place with a successor
  • Some have yet to find the right person to take over the business
  • Others that identified successors aren’t yet ready to take over

“What is clear is that succession planning is a key pain point for many IFAs, but it is often not given enough prominence – partly because it is hard to solve and partly because it is a long-term concern,” Lategan notes. “With so many things competing for advisers’ attention – from building and maintaining relationships, to evolving their offering and keeping up with regulatory change – succession planning is often pushed down the priority list.”

To help advisers get to grips with this issue, Allan Gray has developed a four-part free email series on succession planning. The series will demystify some of the ins and outs of a successful succession planning strategy, including useful information on how you can determine the value of your business. It will also help you navigate the tricky territory of finding the right successor.

What to expect from the series

Part 1: Understanding your options for succession

Succession planning is critical to safeguarding and realising the value of your advice business. Discover the options available for succession and the key factors to consider when devising a succession plan.

Part 2: How to determine the value of your business

There are many factors to consider when trying to calculate the value of your business. Some aspects are less tangible than others and will be trickier to assign a price tag. But this is an important exercise to go through as you plan for succession.

Part 3: How to find a suitable successor

Finding the best fit in a successor is dependent on your intended outcome. In Part 3 we share tips for finding a like-minded partner in either a true successor, a continuity partner or a buyer.

Part 4: The ins and outs for developing a succession strategy

Developing a strategy for succession is not as daunting as it may seem when you know what you want to achieve. In the final part of the series, we share tips for developing a strategy for succession.

“Having the right succession planning strategy in place will not only keep your business in operation, but it will also contribute to a healthy and vibrant financial advice landscape,” concludes Lategan.

To sign up to the series, click here

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