Three quarters of advisers would prefer to find a successor to take over their business when they retire, rather than pursue a sale, according to a poll conducted by Russell Investments.
Of the 52 advisers surveyed from 31 UK firms with a collective £1.4bn assets under management, 75 per cent stated that they would prefer to find a successor, while 8 per cent wished to sell to a consolidator, 7 per cent favoured a book buyout, and 2 per cent would rather run down their book.
Blair Cann, senior partner at Hertforshire-based
M Thurlow & Co, said, “If you build a business on a personal basis – and there is still very much a space for this type of operation in the modern world of commerce – then it goes against the grain to sell the business to a larger, acquisitive organisation, even though such institutions may be capable and competent.
“However well-intentioned and efficient these larger firms may be, you must lose an element of the personal touch when selling on.”
While advisers are likely to make more money selling their business rather than finding a successor, it is less likely that a larger firm will maintain client relationships as well as a replacement would.
Richard Ross, chartered financial planner at Norwich advisers Chadwicks, said, “It is likely the succession route will not maximise my value, but this is tempered by the more favourable tax treatment afforded to selling shares rather than assets, and the warm glow from knowing that something you have given birth to can continue to evolve in a way that reflects your values rather than those of a faceless firm.”
The survey also found that retirement planning was identified as the most pressing need for advice in 37 per cent of cases, with achieving a sustainable income the priority in 27 per cent of cases, and tax planning as the chief concern for 20 per cent.
When communicating with clients, 75 per cent of meetings were done in person, while 20 per cent said that they had used some type of technology, such as FaceTime, Skype and GoToMeeting.
