X

Mortgage & Property

New Insurance Professional

Family Office Bulletin

Mortgage Property

Insurance Professional

Family Office

Success in succession planning

Last month, Giles Dunning, of specialist law firm Stephens Scown, shared his insight into the realities of succession planning for business owners in the IFA sector. Following that theme, we asked Louise Jeffreys, MD of specialist IFA mergers and acquisitions firm Gunner & Co. and Michelle Hoskin of Standards International, AKA Little Miss WOWW!, to pick up where Giles left off, focussing on the importance of planning ahead.


What, why and when?

Succession planning and your ultimate exit as a business owner can come in many forms. Possibly the most talked about route to exit in the press is a trade sale – by which we mean integrating your business into another, usually larger, financial planning-based firm. This a very popular route for financial planning firms to follow. This gives you the opportunity to pass on the responsibility of running the business, whilst typically giving your clients the opportunity to access additional or enhanced services, such as more extensive IHT planning, or access to discretionary fund management.

However, this is not your only option. There are two other routes that are becoming popular: releasing capital by selling to an investor (rather than a party in your industry), or passing on the ownership of the business to all or some of your staff. This could be through a management buyout, or potentially an Employee Ownership Trust (EOT). Paradigm Norton is an excellent example of a financial planning firm which, in 2019, transferred a majority of its shares to an EOT.

The transfer of 80% of shares in the company to the EOT has given all its’ staff a stake in its future.

Both of these options tend to allow your business to continue with a similar culture and approach – something that is harder to achieve with a trade sale.

Right from the very start, it is essential to identify and constantly question your ‘why’. Why are you doing this? What do you really want to achieve by doing so? Questioning your motivations and objectives can help you understand which options would be best for you, and when and how you should put a plan into place.

We often see business owners who spend more time considering the practicalities of exiting their business rather than focusing on their true objectives and how their chosen exit strategy can complement these.

Given the nature of exit planning, it is likely that you are only going to do this once. Making a success of this involves identifying all stakeholders who will be affected by your decision and reflecting on the future impact to them. This often extends to your family, your team, your clients and potentially many others.

When do you start?

The time to focus on these objectives is now. Regardless of when or even whether you plan to exit, planning ahead is a long process and needs to start years in advance. This way, the strong processes and procedures which would benefit you at the point of exit can be fully embedded so that they become common practice within your business and your team. The good news is that these elements will usually bring improved business efficiency in themselves, therefore your early attention to them is strongly recommended.

Continue reading article…

This Week’s Most Read

  • Sir Keir Starmer in pub brawl?

    Predictions of scuffles in pubs came true today, with a landlord being ejected from his own pub by interlopers. Sir Keir Starmer had been listening

  • Class of 2021 retirees at risk of running pension pots dry

    Two thirds (66%) of 2021 retirees risk not having the pension savings to sustain their planned retirement income, according to a new report launched today

  • Sir Keir Starmer, pubs and COVID – taking the piss, not taking a piss..

    We thought you weren’t allowed into pubs these days? Incredible scenes erupted today outside the Raven Pub in Bath, as Sir Keir Starmer was confronted

  • New financial advice service from Vanguard aimed at retirement savers

    Designed for investors saving for retirement, Vanguard Personal Financial Planning launches on the award-winning Vanguard UK Personal Investor platform – vanguardinvestor.co.uk/financial-advice. The service offers personalised

  • The Coming Decade for Climate Solutions

    Randeep Somel, Fund Manager, M&G Climate Solutions Fund, is finding reasons to be cheerful as he uncovers some of the powerful drivers of change which

  • Deepbridge achieves record EIS fundraising levels

      Record £29 million deployed across 37 growth companies Deepbridge attributes success to intermediary relationships and sector focus Venture capital investment manager Deepbridge Capital today

  • A Positive Charge

    Ben Constable-Maxwell, Head of Impact Investing at M&G Investments, is one of the driving forces behind the move to integrate ESG, sustainability and impact investing

  • The Superbia Group commits to accountability and living its core values with the formation of a new independent ESG Advisory Board

    The Superbia Group has today signalled its intent to live its values by announcing the appointment of a new independent ESG Advisory Board. The new

  • Advice firm highlights how growing reputation boosts referrals amid pandemic

    National financial advice firm, Tenet&You, which opened its new offices at Haddington in December last year, has reported an increase in new business since the

  • A SPAC-tacular surge

    Written by Christopher Butcher, Momentum Global Investment Management During a period of extreme volatility and a global pandemic, the initial public offering (IPO) market had

IFA Magazine

Keep updated on the most important financial events 

Make sure you are an informed

wealth professional..

Adblock Blocker

We have detected that you are using

adblocking plugin in your browser. 

IFA Magazine