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Most advisers have no succession plan

Most advisers have no succession plan

Too many advisers are doing what is convenient for them rather than the client, according to a new report.

The report into centralised retirement propositions, published by CWC Research and The Lang Cat, said the area of succession planning is an example of this.

Clive Waller, founder of CWC Research, said that more than 60 per cent of advisers spoken to as part of his qualitative study in summer 2015 did not have a succession plan in place.

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The former investment sales manager and sales director at Zurich Life said: “The vast majority admit they don’t have a plan, and I think for a lot of those that do the plan doesn’t really hold water.

“It is a bigger problem with decumulation because the client will be looking for the adviser to be with them for the rest of their life.

“Adviser-client relationships are not traditionally that long, but in retirement that is different.”

Mr Waller, who spoke to 72 firms for his study – 66 of which were advisory – said many advisers claim to want to sell their business to a like-minded colleague, but the majority end up selling to consolidators such as Bellpenny.

He added that, given the babyboomer generation is disproportionately represented in the adviser community, succession planning would become a more pressing concern.

The report stated: “There is a lack of longevity and succession planning in all respects: both for the client and for their own business.

“The succession of advisers should be part of this and the onus is on the adviser as clients may well not think about it at this point.

“Moving to a different firm could be distressing for clients in later life, however much firms try to smooth the transition.”

The report added: “We still see too much thinking and practice that is centred on the adviser’s own perceptions of what clients expect, and far too much on what is convenient for the firm rather than right for the client.”

It also found a lack of consideration about long-term care in retirement planning. Only 25 per cent of advisers said it was “very true” that long-term care would be a key component of a decumulation plan.

Analysis showed that around one in three advisers do not bring long-term care needs into the equation at decumulation stage.