BREWIN DOLPHIN : By Antony Champion, head of intermediaries at RBC Brewin Dolphin From advising clients on retirement and estate planning to conducting due diligence on third-party discretionary...

By Antony Champion, head of intermediaries at RBC Brewin Dolphin

From advising clients on retirement and estate planning to conducting due diligence on third-party discretionary fund managers (DFMs), succession planning is also a key consideration for many financial advisers.

Advisers will stress to their clients the importance of having a plan in place for when they retire, pass on wealth to loved ones, or to help protect their family should the worst happen to them.

However, given the day-to-day demands placed on financial advisers of running a successful firm, it is perhaps unsurprising that succession planning often takes a back seat when they are thinking about their own business exit. Yet failure to plan not only has repercussions for the business itself, but also for clients and colleagues.

Without a succession plan in place, how can you be sure that clients will continue to receive the same outstanding levels of advice and service? Will business partners be properly catered for? What will the future look like for other advisers working in the firm?

While the death of a principal in any business provides those that follow with a huge challenge, this challenge is magnified when the principal also provides very specific skills, such as understanding and conveying their views on investment market performance, and has built trusted, long-term relationships with their clients.

Of course, other individuals in the business may be willing and able to step up and make decisions about how the firm should progress, what services they should provide and how they wish to continue to provide investment services to their underlying clients. But the way forward can be so much smoother if a succession plan is put in place. Smoother for those colleagues striving to provide the same high-quality advice to clients; and smoother for the clients who have relied on the unique skills and knowledge of that adviser over the years.

Some of the steps to consider include putting key man insurance in place to help mitigate the financial impact of unforeseen circumstances and cushion the blow to the business. It is also important to have a structured centralised investment proposition (CIP) that is repeatable and scalable, so that clients get the same outcome whoever advises them. Finally, having a robust back-office system helps to record key client information and meet PROD, Consumer Duty and segmentation requirements, enabling an orderly, effective and efficient handover of client relationships.

Ultimately, no-one knows what is around the corner, and whilst finding the time to discuss and implement a succession plan might be difficult at times, early planning increases the chances that your clients will continue to receive the same high level of service that you've spent decades building and refining.

Disclaimers:

The value of investments can fall and you may get back less than you invested. This does not constitute tax or legal advice. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Information is provided only as an example and is not a recommendation to pursue a particular strategy.

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