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Dear Rob & Roderic…

Our resident agony uncles and The Ideas Lab directors Rob Reid and Roderic Rennison answer adviser queries

Moving to an alternative back-office software supplier is a major upheaval so what options should I consider and what selection process should I undertake?

The overall impact is more important than seeking the answer “in a box” – there is no system that will fill all of your requirements and you should be wary of those who say they can deliver this. It is better to work backwards, that is, what ideally would you like to produce tack or store? Make sure any contract allows you to cancel without cost if they fail to deliver and better still, pop in a penalty clause.

You could purchase an off-the-shelf accounting package but the obvious drawback is that it won’t be integrated with whatever system you have in place. A better starting point is to question your current supplier to ensure your understanding regarding their current functionality is correct and, if so, what upgrades are planned and the timescales involved. If these timescales are acceptable, working from spreadsheets in the short term may be an acceptable interim measure. However, the absence of ideal software should not be used as a reason for delaying any movement to adviser charging.

I am debating the relative merits of retaining smaller and less remunerative clients and employing a junior adviser to deal with them, versus passing them to another firm. What is your opinion?

You may find that you don’t have enough of the right clients and that it is not something to worry about. It’s the spur you need to focus on the markets that can produce the optimal clients. Always be deliberate in your strategy and avoid the default or accidental approach.

Segment your existing client base and decide what proposition(s) you want to offer. This will be driven by the nature of your existing client base, your preferences and experience/levels of expertise. You may decide that you want to pursue a very specific and targeted client focus and that you will make arrangements for those clients who do not “fit” to be offered the opportunity to move to another adviser. You may want to provide ongoing services to all clients, offering them different propositions provided they are prepared to pay for these services at what you consider the appropriate level. Only if they choose not to do so would you then find an alternative adviser.

I want to retire in about five years and I am being bombarded by people and organisations giving me lots of advice as to how I can best realise thevalue of my practice. What should I do?

If you are not capable at the time of sale to carry on, that is, you are not at level 4 or above and operating a feebased model, then it’s a distressed sale – don’t kid yourself otherwise. Personally, it will not produce a capital sum, it will be an earn-out. Far better to be at the right level and fee-based. Then the sale is of an asset and not a liability.

There is no right or wrong answer to your dilemma as it depends on a number of factors, including your financial situation, personal preferences, your willingness to study to achieve QCF level 4 if you have yet to retain it, the shape of your client base and the financial profile of your practice. What you should definitely do if you feel – understandably – that you cannot make the decision on your own, is to seek expert, impartial advice.


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