In Focus: Profitable advice business  

'Involving all stakeholders is key in succession planning'

'Involving all stakeholders is key in succession planning'

Getting all stakeholders in a business involved in the succession process is key to an advice company's success, says Philip Marcovici, co-author of Circular Economy Principles for Family Business and Wealth Stewardship.

Marcovici points to so-called 'circular economy principles', which he says are of great value to financial advisers thinking about securing their succession.

Circularity, in broad terms, means both avoiding "waste" and finding value in human resources within families and businesses.

He says applying a certain set of principles can benefit clients, employees and the owners of the advice business alike.

Marcovici tells FTAdviser In Focus how he believes financial advisers should go about planning their succession.

Philip Marcovici is co-author of Circular economy principles for family business and wealth stewardship





FTA: Why should all advisers have a succession plan in place? 

PM: A succession plan is critical to the clients of financial advisers. While that reason alone is enough to encourage that all advisers have a succession plan in place, it is easy to see how an effective succession plan will also benefit all stakeholders in the financial advisory business itself.

It is important that this can be achieved in a way that reflects circular economy principles, which means that, among others, resources will not be wasted.

The succession plan can include interesting new roles for senior, retiring advisers, allowing them to both mentor their successors and retain client-facing roles while stepping back from full-time engagement, which is one example of a step that would be in the interests of both clients and the advisers involved.

FTA: At what point in time in a business's life should this plan be put in place?

PM: The earlier the better. What is clear is that an effective succession plan is part of a strategic plan and will incorporate elements that better align client interests with interests of the advice business and of each adviser.

Having an effective succession plan is also an opportunity to communicate with clients and to show a focus on the interests of those clients. A good succession plan is not only strategic, but it can be a marketing tool.

FTA: You have written a book about succession planning in family-owned businesses, can you explain your motivations behind that?

PM: I have worked with many wealth and business-owning families around the world and I am convinced of the important benefits they bring to economies and to their communities.

But there are many issues that typical families face, and the most important thing about succession planning is early and open discussion.

Knowing this, I like to encourage dialogue and find that transparency on succession is the most important thing for any family to consider.