I grew up around the financial planning industry. My father was one of the “first wave” of financial planners back in the pioneering days of the 1980s in the UK.
Originally a talented school teacher, Dad made his career change to the financial planning industry in his mid-thirties. How I smile when I recall that one of the main things that attracted him to this new career was that he needed no qualifications whatsoever to get started! He finished work as a teacher on the Friday, did a weekend residential course, and by Monday morning he was out walking the streets, knocking on doors and selling insurance. How things have changed…
There was also not much of an APL back in those days – Dad had just one product to sell, and by all accounts he was very good at selling it!
From those humble beginnings, my father grew a large and profitable financial planning business which he ultimately sold out to his co-owner. This was the first corporate transaction that I had witnessed in my life. Seeing Dad successfully grow and sell his business had a profound influence on my career choice as a corporate lawyer. And, the way in which he built assets outside the business and protected our family with insurances gave me an enormous appreciation and respect for the value of sound financial advice.
As a corporate lawyer, I now help financial planners and their clients with all aspects of business succession planning, including preparing for sale, corporate restructures, mergers and acquisitions, management buy-outs, and inter-generational transition.
Working with your clients on business succession planning
Through many years spent working with financial planners, one thing that struck me some time ago is how well placed you guys are to take a key role in helping your clients with business succession planning.
In the post-FoFA world, just as you purport to “own” the estate planning space, your next frontier as a profession should be to stake your claim as facilitators of business succession planning processes for your clients.
Private and family-owned businesses are the largest sector of the Australian economy, and the baby boomers who own those businesses started turning 65 this year. The demographers are in heated agreement that we are staring down the barrel of the largest transition of private wealth that Australia has ever seen. So, the need and opportunity for you guys to get on board and assist your clients with this transition is compelling.
Your role as co-ordinator
Just think of what you, the financial planner, bring to the table. Business succession planning is all about projecting forward and goal setting, and above all other professionals you are the masters of that. Add to this a broad knowledge of finance, budgeting, tax, corporate structures, insurance and asset protection, and you are looking at a potent combination of skills.
Acting as the co-ordinator of your client’s business succession process, you the financial planner can then build your networks by working closely with your client’s accountant and through introducing specialist lawyers, tax advisers, and other necessary professionals to assist. The “hub and spokes” model in action!
Talk about succession and the opportunities will follow
By regularly talking to your clients about their business succession goals, just think of the benefits that will flow in terms of client retention, relationship building, and engaging with the next generation sons as your business owner clients approach retirement. And of course, the opportunities for ownership protection insurance, key man insurance, and building non-business assets will just naturally follow.
And, when your client ultimately sells, there will then be the sale proceeds to invest. How exciting is that?!!
So, get out there and start having meaningful discussions with your clients about their business and ownership succession goals. Who knows where those discussions may lead…
