Succession planning is vital to the ongoing success of a financial planning firm. Simoney Kyriakou speaks to those shortlisted at this year’s Personal Finance Awards to uncover their strategy
Seeing emails at 8:00am headed ‘Outlining objectives and key results for the next seven years’ is enough to send a chill down the spine of even the most hardened senior manager.
It is vital, however, to have that vision and to engage the whole of the advisory practice in helping to make that vision a reality.
And when it comes to succession planning, business owners must be confident they have appointed the right people to carry that vision to make the firm a success, not just seven years into the future, but 77.
That is why, in the book he co-authored called Circular Economy Principles for Family Business and Wealth Stewardship, Philip Marcovici says getting all stakeholders in a business involved with the succession process is “key” to an advice company’s success.
Why is it important?
At this year’s PFS Personal Finance Awards, three Chartered firms were shortlisted that demonstrated they understood these principles: AAB Wealth, The Private Office and Wealth Experts.
So, why is succession planning so important? Lucie Thornton, chief people officer at The Private Office, puts it succinctly: “It ensures that we have the right talent at the right time and allows us to deliver excellent client service.”
Terry Hewes, director of Wealth Experts, adds: “Succession planning benefits the firm by allowing us to develop the team in the right way, focusing solely on the client and planning, rather than just selling the product.”
He cites “strong company values, which we have invested time in getting right” as integral to the firm, so when it comes to recruiting talent, they are culturally a good fit with Wealth Expert’s core values and behaviours.
According to Hewes, this helps to “ensure a consistency of approach and a team that works well together”.
Without this, the whole strategy could unravel. Andrew Dines, Chartered financial planner at AAB Wealth, warns:
“We work closely with a range of businesses and owners and often see first-hand the problems that can arise where a clear succession plan is not in place.
“A robust succession plan allows businesses to have confidence in the future and that their clients are in safe hands.”
He adds that the knock-on effect with the whole team and the end client is a vital consideration, saying: “A focus on professional and personal development demonstrates both internally and externally that we are proactively planning for the future.”
Having a clear development plan for every member has been key to our success in retaining great team players
Implementing the succession plan requires care and consistency. So, how do companies go about that strategy?
Training is vital, as Thornton explains: “We adopt a mentoring and buddy system to ensure new advisers are trained and developed in the best possible way.
It helps as they can see their career path ahead of them.”
Hewes says: “We offer apprenticeships and professional qualifications, right through to professional membership courses.
If a member of our team wants to progress, we will do everything to support them.
“All our planners were able to develop by building knowledge and sitting exams alongside on-the-job training and we look to replicate this within Wealth Experts for the up-and-coming generation.”
Dines believes having a firm-wide graduate programme in place helps with ensuring every office is working towards the goal of finding the next generation of advisers.
He says: “We have had repeated success through our graduate programme and our commitment to developing our team is reflected in our low staff turnover.”
Of course, succession planning is not always smooth sailing – even when you meet advisers who inherited the business from their parents or grandparents.
Thornton says: “When we first started with our adviser academy, there were few companies who had such a clearly defined career path and development plan. Our challenge became only selecting a defined number from a lot of great CVs.”
According to Hewes, one big challenge is trying to get the word out there about the profession. “We find many younger people are still unaware of our profession as a career, therefore attracting talent can be difficult.”
He gives as an example their latest graduate adviser, who originally interviewed with the sister firm of accountants. Three years later, after starting as a paraplanner, they are now a financial planner
Thornton adds: “If you have a clear programme and can demonstrate success in career progression, it becomes an exciting proposition to a new recruit.
“There will always be colleagues that leave the business but you need to ensure you have a pipeline of talent within the business to mitigate these losses.”
To help combat these challenges, Hewes suggests forging links with colleges and universities in the area. Wealth Expert has strong links with Keele University and is supporting four young graduates at different stages of their careers.
The firm also offers an apprenticeship in partnership with Skills Edge and the CII.
Having a plan of progression is key, as Dines explains: “Having a clear development plan for every member has been key to our success in retaining great team players.”
For all three shortlisted firms, good training, a clear career path and supportive work environments are critical to developing and retaining talent – and talent is the key to getting that succession plan right.
Simoney Kyriakou is senior editor of FTAdviser