Firing line 

Part of our succession planning is having me not do all the work

Part of our succession planning is having me not do all the work

Passing on a self-made business for the next generation to run often comes with numerous technical challenges.

Ensuring this process runs as smoothly as possible is at the heart of any succession planning strategy.

But how does a company ensure the culture of the business also survives?

For Nick Bamford, financial planner and director of Informed Choice, the biggest challenge is “letting go, and accepting that there are better people to take over”.

After a 24-year tenure at chartered financial planning business Informed Choice, Nick Bamford and his wife Andrea both intend to retire from the business in early 2019.

Building an employee ownership trust is one working plan for how his company will succeed once he and Andrea do eventually retire.

This month, Informed Choice obtained a second office space in Petersfield and is set to expand its staff from 13 to 16 members by the end of 2018. The company will hold onto its Cranleigh-based office.

Mr Bamford reveals the business is in talks with the Employee Ownership Association to potentially launch an employee ownership trust.

He explains that this involves creating a trust and selling the majority of the business’s shares to the trust. Shareholders who sell to the trust are paid from any future profits of the company.

“Instead of having a capital sum and you go off into the sunset, you actually get paid for your shares over a protracted period of time,” says Mr Bamford.

Mr Bamford explains: “There is continuity of the company for the benefit of the shareholders and the clients and the employees.

"Existing employees who want ownership of the company but don’t have shares will also be able to benefit from it. We have looked at the technical part of it, we are now looking at the emotional part of it,” he continues.

Mr Bamford says an employee ownership trust is not “a socialist thing to do,” nor like Labour’s recent proposal for bigger corporations to give 10 per cent of ownership to employees. He says this is different because “it is trust-based rather than individual share-ownership based”.

Nick Bamford and his wife own 70 per cent of Informed Choice’s shares, while their son Martin owns the remaining 30 per cent.

Aside from exploring an employee ownership trust, Mr Bamford says Informed Choice is training its next generation of financial planners to prepare for their eventual retirement.

“We have just offered a role to another trainee paraplanner. We are interviewing for an experienced paraplanner and we are recruiting for an administrator,” says Mr Bamford.

New blood

A new chartered financial planner is due to join the business as director of retirement and income planning, who will become a board member.