Succession-proof your firm by planning with clients


How do you attract the next generations of clients to your advice business, and how can you make sure they stay with you through the years?

Speaking on the FTAdviser Editor's podcast, financial specialists claimed succession planning for your clients is the most certain way of succession proofing your own business.

Consider the fact that, over the next decade, Capgemini has estimated £5.5tn is due to pass between the generations in what is known as the Great Wealth Transfer.

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Thousands of younger people in Britain will suddenly come into a lot of money, and they will need help in investing it tax-efficiently and in line with their ethics and values.

But if your clients are happy to recommend you to their children and grandchildren, what measures have you put in place to make sure that the advice journey these younger clients start with you will also end with your firm? Will they stay the course or jump ship?

And how can you make sure that you capture that audience in the first place?

For Shaun Godfrey, head of marketing for St James's Place, getting younger clients interested in finances is all about education for a start.

He said: "It's not just about things such as an investment but basic elements to begin with. I'd like to see more understanding of what the younger people want to know. Sometimes we older generations in financial services may tell younger people what we think they should know, but actually we should ask them what they want to know."

That would be his starting point. Giles Dunning, partner at law firm Stephens Scown, agreed.

He said: "Clearly the next generation of savers is the next generation of clients and they will want to do things on their own terms. So advisers should look to foster relationships with younger savers - perhaps even before they come into this money."

But will advisers all have to become tech-savvy and use the latest apps and technology to attract and retain the younger clients?

Tim Fassam, director of government relations and policy for the Personal Investment Management and Financial Advice association, does not think this is essential.

He said: "It is all about balance and being realistic about what people want." The old stereotypes, such as that older clients do not like tech and younger people will not want face-to-face advice, were turned on their heads during the Covid-19 pandemic, he explained. 

For Mr Fassam, the starting point would be to explain the opportunities that come with engaging with their savings.

While tech is "certainly part of it" and there will not be a "tolerance" for things the younger generations see as wasteful - such as filling out the same forms repeatedly, he said advisers had the soft skills necessary to explain and engage people with their wealth.

Moreover, the industry will need to start attracting into the sector the kinds of staff that will speak to a wider potential demographic of clients, he said, which ties into how advisers can succession-proof their firms.