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Darren_Smith's avatar
Darren_Smith
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8 months ago

Succession Plan - Be honest ! How prepared are you?

This is something that is so close to my heart at the moment as I am in the home stretch of realising the dream that I mapped out 8 years ago!  A real mixture of emotions and this has been 8 years in the making to get to that realisation.

With a number of advisers still looking to transition out of the industry over the next 3 years I am very interested to understand and get comments on how prepared they are, is it documented in an actionable plan and what areas are they focused on to maximise their attractiveness and value. 

Also, how are they protecting their clients that they have nutured over many years to minimise the impact on them as this will ultimately have an reputational impact on the whole industry and the success of that transition.

client engagement
practice management
succession

8 Replies

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  • Tangelo's avatar
    Tangelo
    Icon for Advisely Partner rankAdvisely Partner
    8 months ago

    Darren_Smith also an important question for those self-licensed businesses.  From a compliance/governance perspective, we see a lot of sole traders who are a key-person on their AFS licence with not much consideration given to succession.  Having a solid and actionable plan would certainly help mitigiate key person risk as well.

  • JennyB's avatar
    JennyB
    Icon for Advisely Board rankAdvisely Board
    8 months ago

    Interesting thoughts Darren_Smith as a business we are specifically targeting partnership and equity ownership from within our team and have developed a pathway to partnership model.  The catelyst came when my now business partner joined me as a senior adviser and in the interview asked if this worked out he wanted the opportunity to buy in.  We have then rolled this model out to our senior team and are about to embark on the next phase of smaller equity parcels via a separate unit trust.

    • Darren_Smith's avatar
      Darren_Smith
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      8 months ago

      JennyB -Some great strategies that you have in place. Well done!   

      I think one of the challenges that many business owners face with internal successions is that as the business value increases, that the ability for younger or individuals is the capacity or desire to raise the capital needed to buy into the business at a meaningful level. 

      With our team we were able to faciliate almost 75% of staff had some equity participation which encouraged and rewarded them in taking an interest in the success of the business... Many different ways to structure and help others participate in the success of the business. 

         

    • DebKent's avatar
      DebKent
      Icon for Advisely Index Top 10 rankAdvisely Index Top 10
      8 months ago

      Well done Jenny its not an easy path to achieve this if you can that you have confidence in moving out of your business one day

  • DebKent's avatar
    DebKent
    Icon for Advisely Index Top 10 rankAdvisely Index Top 10
    8 months ago

    Darren_Smith like you I am also looking at how to position my business for when I decide to commence another chapter of my life.  The critical thing for me is clients and staff the questions I have is should I merge with a similar practice?  do I have enough time to bring another shareholder on board to take over the business?  or do I sell which is the hard one.  My focus right now is ensuring the business continues to grow and is in good shape for any of the decisions.

    • Darren_Smith's avatar
      Darren_Smith
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      8 months ago

      DebKent thanks for taking the time to share.  All great points!

      One of the greatest lesssons for me in the process has been to appreciate the value of insights, coaching from an unbiased professional who takes out some of the emotional anchors in assessing areas of importance and focus.

      We all have them either consciously or unconsciously.

      I remember listening to Carl Richards with that simplistic summary 'by definition we cant see our own blindspots!'  

      Not surprising that this is a key and valued role we all play in our clients lives when helping them prepare for an make the transition..