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Advisers in denial over retirement

Many advisers are unprepared for succession despite being aware of the need to plan for it, Brian Raven has said in the wake of a survey of advisers over their own retirement plans.

The chief executive of Tavistock Investments, which provides administration and compliance to the group’s independent advisers, said: “Exit planning is not just about securing some capital value from your business, it is also about a duty of care to your clients.”

According to Mr Raven, it was “ironic that advisers spend their professional lives planning for their clients’ futures but seem to be peculiarly bad at planning” their own business succession models.

His comments came as Tavistock Investments surveyed its 187 financial advisers between December and March 2015 on their key business concerns.

Nearly all of the advisers who took part said they were concerned about how their clients would be looked after once they retired, and the majority said they also wanted to secure financial certainty over their retirement exit.

However, when asked whether they had a retirement plan 91 per cent said they did not, while 90 per cent said they did not have a guaranteed retirement contract in place to realise capital from the sale of their businesses.

The importance of succession planning has been highlighted by Graham Cross, chief executive of national advisory firm Helm Godfrey, which in September 2014 created a succession plan for its retiring advisers, bringing in paraplanners to be trained to take over when the current adviser retired.

Mr Cross said: “Putting succession plans into place is vital to the longevity of an advice business; without them a firm cannot survive. We have put in place a training scheme whereby we take people on as admin executives and bring them through to becoming qualified paraplanners and, finally, fully certified and/or chartered advisers.

“In doing this we can ensure our clients will always be looked after by a trusted individual whom they know and have a relationship with, which helps avoid any potential issues that can arise when an adviser retires or leaves.”

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