In response to Alan Holton’s article on business continuity and succession planning, Tony Calitz, a sole proprietor in Durban, raised a number of very important considerations.
Most clients will NOT simply grant permission for their adviser to pass on their personal and financial information to someone with whom they have not had any dealings. Personally, I fall in this category and I have mentioned this to a few of my elderly clients who all had the same response.
I’ve made a career out of this industry since 1985 and been independent since 1999. I’m almost 64 years old and have no intention of registering a company – and there’s no law that can actually compel me to do so. I already have my hands full dealing with and servicing my clients at least 5 days a week and simply cannot consider re-registering with the FSB – apart from the effort involved, there’s also the added expense of additional licenses/fees/requirements in being a FSB-approved company, not to mention the added requirements of Compliance Officers/Accountants etc. It’s simply not economical and/or practical. This is the reason why the FSB requirements for continuity should EXCLUDE Sole Props.
Alan, quite correctly, states that when a Sole Prop dies, his business dies with him, so no amount of planning within the realms of Sole Proprietorship will ensure continuity without, in my case, breeches of confidentiality.
Furthermore, each and every company with which I hold contracts has access to my clients. A simple telephone call would have them pointing the client (who is, after all, (contractually) THEIR client) in the direction of a living adviser who will be available in their area – and who they will be able to decide to work with – or not. Every company with which I hold contracts would be informed promptly in the event of (a) my retirement & (b) my demise.
Certainly, if I were to retire, I would ensure ALL my clients are informed well before the time, and I would try to assist them to meet a new adviser – but – surely the responsibility to ensure continued service of THEIR products to THEIR clients should lie with the relevant companies who, upon being notified of my demise, should ensure they contact the clients promptly and offer them the contact details of advisers in their area?
In my opinion, the FSB requirements/demands of S 20 with regards to Sole Props are both ill-considered and unreasonable. As I mentioned to the Moonstone trainers at a few workshops in the past, I have left my business book, including all my computer equipment containing the relevant client data to my brother in my WILL – he’s also an authorised FSP & is suitably qualified to deal with my clients. I was told this was “adequate”. I told a number of my clients this entire story and told them that even though my brother might contact them, they will be able to make contact with advisers in their areas and make their own decisions moving forward – remember, they already have that option.